Cushman & Wakefield 2011 European Cities Monitor shows London best business city
More companies look to expand in Moscow
11 Oct, 2011, London
Cushman & Wakefield European Cities Monitor
· London retains number one position for best European business city overall
· Paris and Frankfurt hold second and third rankings
· Amsterdam and Berlin move into the top five cities in which to do business
Moscow has been ranked the most desirable European city for companies to expand into for the second year running, according to a survey by global property consultant Cushman & Wakefield. The number of European companies which expect to locate in Moscow within the next five years has jumped to 57 from 47 in 2010.
London, Paris and Frankfurt remain the top three European cities in which to do business overall. Amsterdam has scored strongly this year, continuing the movement seen in 2010 to climb up to 4th place from 6th place. Berlin also performed well and moved into the top five, up two places from 7th position last year. There was also a large rise in the number of business leaders expecting to locate in the city. 23 respondents cited Berlin as the most favourable city in which to expand, almost double that of 2010 (12).
In its 22nd year, the European Cities Monitor report is based on interviews with board directors at 501 of the largest companies in Europe. It includes an overall ranking of which European city is considered to be ‘best for business’ and the ‘best city in which to locate a business today’. In addition to this, 36 cities are ranked against criteria such as quality of life, access to markets, availability and quality of staff, cost of office space, telecommunications and transport links.
As well as increasing its lead as the number one city for companies to expand in, Moscow has also risen significantly in the ranking of best European cities in terms of easy access to markets. This year it takes 11th position, up from 19th in 2010.
Tim Millard, Managing Director of Cushman & Wakefield in Russia, said, “Moscow remains the most attractive city for future corporate expansion in Europe and is considered more than twice as important as the second place city as a driver of future corporate growth. This is being accelerated by very strong expansion in consumer spending, with the potential for this to be leveraged up considerably due to the current low levels of penetration of consumer credit, strong growth in B2B sales and large potential in regional cities beyond the traditional powerhouses of Moscow and St Petersburg.
“All of this activity is underpinned by strong GDP growth, continued high oil and gas prices and a very healthy level of foreign currency reserves. This growth in corporate activity will drive the next commercial property cycle and will give the bold investor the opportunity to earn significant returns from both income growth and capital appreciation.”
Germany has more cities in the top 10 than any other country; Frankfurt (3rd), Berlin (5th) and Munich (9th).
Martin Brühl, Managing Partner of Cushman & Wakefield in Germany, commented, “A variety of factors have led to Berlin’s rising importance over the past three years and to its excellent result in this year’s ranking. Berlin is a bustling city. Its cultural infrastructure is second-to-none in Germany. From opera to flourishing theatres, from film festivals to museums and galleries. It’s all there. The city’s educational landscape, with its renowned universities and colleges is similarly strong.
“Underpinned by a relatively tenant-favourable residential market, these are strong pull factors; not only for the media and creative industries, but in general for young, highly-educated people from all over the world. A very important location factor! As Berlin offers attractive office leasing conditions and as the city’s promotion of itself as a business location is strong and convincing, entrepreneurs from around the globe are drawn, and will continue to be drawn, to the German capital well into the foreseeable future.”
Bucharest is the biggest riser in this year’s survey of best European cities in which to do business, moving up eight places from 35th to 27th position.
Andrei Birsan, Head of Office Agency, Cushman & Wakefield in Romania, said, “Bucharest offers high-class office buildings with very attractive financial terms. These are important factors for companies looking to lease new premises for their business, or relocate their current operations. Recently, Bucharest’s infrastructure has been improved and there are plans for further development. This will improve
accessibility for the business centres year by year. The reduced costs, quality and availability for office space make Bucharest more and more attractive for companies to develop their businesses in.”
Jan Willem Bastijn, Managing Director of Cushman & Wakefield in Amsterdam, commented, “Despite the uncertain economic times, international corporates still perceive Amsterdam to be a business city which provides enough stability to expand into. Amsterdam has risen two positions from 6th to 4th ranking, most likely due to the strong fundamentals that the city has always offered, such as a diverse occupiers market, steady political environment and international orientation.
“Globally, the results show that the gap between the top three cities is decreasing considerably. London, Paris and Frankfurt have been in the top three ranking ever since the survey was first undertaken in 1990 but cities such as Amsterdam and Berlin are now judged as being almost as attractive as Frankfurt.”
London is ranked the number one city in six of the 12 major categories: easy access to markets, customers or clients; availability of qualified staff; transport links with other cities and countries; quality of telecommunications; languages spoken; and internal transport. However, it scores poorly on the cost of staff and office space, and levels of pollution.
James Young, Head of Cushman & Wakefield’s London Group, said, “Over the last few years London has retained its position as Europe’s principal business and financial hub, despite the economic crises that we have been experiencing. However, the city cannot rest on its laurels.
“Government, both central and local, has to ensure that it provides an attractive environment for businesses of all sectors to operate in. Of particular concern is the banking and finance sector, with the political, regulatory and tax pressures that exist. London’s health depends on ensuring that the City retains its status as the number one European, if not global, financial centre.”
Gordon Innes, CEO of London & Partners, the official promotional agency for London, added; “The results of this report confirm that London remains the best European – if not global – city in which to do business. Since our establishment in April of this year, London & Partners has continued to pave the way for international companies looking to expand or set up in the UK capital, and we are delighted that the report also recognises our work in promoting London as the best city in the world to live, study and invest. London & Partners is dedicated to continuing this good work to ensure that London retains its status as Europe?s principal business and financial hub.”
Warsaw has risen three positions, from 24th to 21st place of the best European cities to do business in. It has taken over from Leeds as the top location for ‘value for money of office space’ but has been pushed into third place in the ranking of top European cities in which to expand.
Hanna Gronkiewicz-Waltz, Mayor of Warsaw, said, “We have been committed to creating an investor-friendly environment in Warsaw for many years by investing in public transport, road system, information and communication infrastructure, as well as improving the efficiency of the municipal offices. We are pleased that our initiatives are appreciated by international companies and institutions.”
The top four factors for companies deciding where to locate/ relocate their business are, in order of importance; ‘easy access to markets, customers or clients’ (60% of respondents cited this), ‘availability of quality staff’ (53%), ‘quality of telecommunications’ (52%) and ‘transport links with other cities and internationally’ (42%).
Fergus McCarthy, Senior Consultant in the European Research team, Cushman & Wakefield, said, “With the outlook for the global economy uncertain, business preservation remains a key objective, with many companies continuing to consolidate and restructure their operations. Nevertheless, on the back of improved corporate profitability and stronger balance sheets, more and more executives are now seeing opportunities to grow and expand their organisations.
“Easy access to markets, availability of qualified staff and quality of telecommunications are all considered critical factors driving the decision-making process. Accordingly, London, Paris and Frankfurt continue to be ranked as the best three cities overall, although Amsterdam is slowly narrowing the gap on the top three.”
Those surveyed viewed ‘new opportunities from the emerging markets for products and services’ as the number one trend/issue most likely to impact on business over the next five years (31%). With concerns regarding an ageing population across Europe, ‘demographic and workforce change’ is the second highest ranked (16%). Technological change took third position (15%).
Listen to a podcast of Fergus McCarthy, Senior Consultant in the European Research Team, discussing the report here.
From the Cushman & Wakefield European Cities Monitor 2011 page 24
From the Cushman & Wakefield European Cities Monitor 2011 page 23