Banks will require an additional 1.6m square feet or 148,000 m2 of space in Central London over the next three years - equivalent to four Shard Towers or five Heron Towers, according to the latest research by BNP Paribas Real Estate.

In its biannual survey of financial institutions, the leading real estate adviser found that banks and other financial services companies will be expanding with a total of about 11,500 extra employees over the next three years, in a clear sign of confidence as the economy recovers.

BNP Paribas Real Estate has published the report (which it last carried out in 2008), using independent research company Lighthouse to interview a wide cross section of financial institutions.

Fred Hargreaves, head of City agency at BNPPRE, comments: 'Each time we’ve run this research our forecasts have been pretty much bang on. In 2004 our research predicted that banking requirements in London would spark a City recovery of take up between 2005-2007 and this happened in late 2004 right up until the crisis in mid-07.

‘Similarly, in 2008 on the back of this research, we predicted an initial absence of banking & finance demand, then a return from 2010 which again was accurate, despite initial reservations from the market about our findings. We are confident that our research gets to the heart of banks’ strategies and therefore provides a very accurate barometer as to what this means for Central London, and particularly the City, and Mayfair/St. James’s in terms of take-up.'

Over the last five years, the ratio of Financial and Banking Services take up in the City as a proportion of overall take up has been 37% in 2006, 21% in 2007, 22% in 2008, 31% in 2009 and 36% in 2010. The research shows that typical take up in the City per annum is 3.1 million sq ft, and by translating projected jobs growth into floor space, the banks’ expansion will mean extra requirements of roughly 550,000 sq ft a year up to 2014.