London overtakes Paris as top Euro city for business locations

Real Estate Weekly,  Oct 17, 2007  

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London has once again increased its margin over Paris as Europe's top city to locate a business according to European Cities Monitor (ECM), the annual location survey of Europe's leading companies carded out by global real estate consultant Cushman & Wakefield.

The UK capital is the top-rated city for half of the 12 factors which are ranked to give the overall league table. This year, London has improved its scores in areas including climate created by government (up three places to No 2). However, it fell nine places to 25th for cost of staff.

European Cities Monitor (ECM) is based on interviews with senior managers and board directors in charge of location of 500 top European companies. It looks at factors regarded as important by companies when deciding where to locate, and then compares the performance of 33 of Europe's leading business cities on each factor.

Availability of qualified staff, considered an 'absolutely essential' factor by 62 per cent of respondents, has overtaken access to markets as being the most important factor to consider when locating a business. In third place is quality of telecommunications, which this year overtakes external transport links.

Regarding London's position, James Young, head of the City of London office of Cushman & Wakefield, comments: "From year to year London is consolidating its position as part of an elite group of global cities, together with New York and Tokyo. With the Olympic Games on the horizon in 2012, providing there is no major global economic downturn, London's future seems to be only in one direction--up."

In last year's ECM, London achieved a weighted score of 0.91, which has now increased to 0.92, while Paris' has gone from 0.59 to 0.57. Back in 1990, the first year of the annual survey, London's score was 0.81 and Paris' 0.66.

Behind London and Paris comes Frankfurt, and then the closely grouped cities of Barcelona, Amsterdam and Brussels, with Amsterdam just overtaking Brussels this year.

The three biggest risers in the ranking are all regional cities: Geneva, Lyon and Manchester. Elaine Rossall, the author of ECM and C&W's Head of Business Space Research & Consultancy, explains: "Regional cities are increasingly becoming more business oriented, and are proving that you don't have to be a capital to attract business. They are also benefiting from a more cost-conscious business world, with, as the survey shows, a third of those interviewed saying that to offset rising operational costs they would either relocate to another destination in the same country or another lower-cost international destination."

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Geneva is the biggest riser in the overall ranking, up eight places to 12th, reflecting significant rises in the individual rankings for access to markets (up 13 places to 14th), telecommunications (up 11 to 9th), external transport (up seven to 15th) and quality of life (up seven to second). Robert Curzon Price, Head of Client Solutions of C&W's Alliance Partner in Switzerland SPG Intercity says: "Geneva is geographically in the heart of Europe and has excellent communication links with other cities and countries, while when it comes to quality of life--a key factor in attracting expatriate workers--it comes second only to Barcelona."

According to the survey, the 'growth of China as a market for products/services will have the greatest impact on business over the next ten year, followed by the enlargement of the EU.

Moscow provides the greatest business opportunities out of Europe's 'emerging' eastern cities, followed by Bucharest and Istanbul.

More than a fifth (22%) of companies have relocated/outsourced to another country in the past 12 months, with 51% choosing one of the new EU member states in Central & Eastern Europe (CEE) and 35% another Western European country.

The same proportion (22%) plan to relocate/outsource to another country in the next two years. Again, new EU members in CEE are the favoured destination, with China and other Western European countries in joint third position.

The survey alos found that Moscow can expect the biggest influx of new companies over the next five years, with 63 of the 500 sampled companies expected to locate there, whether offices, manufacturing or sales outlets. Paris is No 1 of the Western European cities. In last year's survey Warsaw came top.

Regarding new global locations, Shanghai comes top followed by Beijing and Mumbai.

London and Paris remain the best-known cities as business locations, although the gap between the two is narrower than last year's survey.

Barcelona, Madrid and Prague are seen as the cities doing the most to improve themselves as business locations, followed by Warsaw, which has overtaken Berlin and Budapest.

In a new question for this year, London comes top followed by Pads and Barcelona for the best hotel accommodation for business travellers, and Barcelona, followed by Madrid and Berlin, for the best residential accommodation for expatriates.

COPYRIGHT 2007 Hagedorn Publication
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