Swathes of office space across Canary Wharf could be left empty because of the UK’s decision to vote for Brexit, according to new research.
Up to 26million sq ft – equivalent to 23 O2 arenas – is at risk of being deserted if Britain leaves the single market.
The decision to leave the European Union could mean businesses would look to move their operations overseas said a report by DealX , a London and Berlin-based analytics start-up.
The current “passporting” rules enable banks, insurers and asset managers based in the UK to trade in other member countries and are widely seen as cruicial to the health of London’s financial sector.
DealX estimated more than 1,900 firms might review office requirements if passporting was revoked with more than 9% of London commercial space at risk, mostly in Canary Wharf and the City.
The study found 91% of the space initially at risk was occupied by companies in the banking, insurance and asset management sectors.
CEO and co-founder of DealX Joseph Kelly said the findings put pressure on the Government to protect the capital in its negotiations.
He said: “What the data shows in great detail are the sheer number of buildings whose occupiers rely on passporting to conduct their business.
“Thousands of buildings, owned by all manner of parties, will be reliant on the next Prime Minister carving out a sensible deal to protect London.”
The survey of 100 financial businesses in London, showed 70% believed the UK would be able to retain its passporting rights through EU negotiations.
However 55% of respondents had already looked at relocating staff to a different EU base. And 57% of those using passporting said they may be forced to relocate staff.
This means overall up to 1,100 of the 2,079 companies Britain has registered to use EU passporting, could depart from our shores, leaving 9% of London’s office stock empty.
Among those surveyed, Dublin was the most popular potential destination for relocation, followed by Luxembourg and Frankfurt. Edinburgh was found to be a potentially popular destination in the event of Scotland retaining single market access and passporting rights.
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