Prague still an attractive destination for international firms.
7 Oct, 2008,
Smaller regional centres in Europe strengthen their position
London and Paris are Europe’s best cities for business. Still, Moscow and Praguecan expect the biggest influx of companies. Barcelonais the city with the highest quality of life. These are the findings of the annual European Cities Monitor study published by Cushman & Wakefield, a global real estate consultancy.
The report is based on research among senior managers in charge of expansion into new regions by 500 of Europe’s largest companies. The research takes place in the form of interviews, which Cushman & Wakefield commissioned from Taylor Nelson Sofres, an independent agency. The poll covers 34 European cities ranked against criteria such as transport links, telecommunications, availability and quality of staff, cost of office space, and quality of life.
“Prague was ranked at no. 19 on the chart for this year. Compared with last year, it dropped five places, giving way to cities such as Düsseldorf, Manchester, Lisbon, Hamburg, and Lyon. Except for Lisbon, none of these are capital cities – which confirms the trend of increasing interest in regional cities,” says Alexander Rafajlovič, analyst from Cushman & Wakefield’s Prague office. This trend can be confirmed in the Czech Republic also.
“There are several reasons why Prague’s score has decreased; in general though, we can say that the main reason is that other cities’ scores have improved. This causes a relatively worse perception of Prague among managers. Similarly to last year, Prague ranked 4th in terms of lowest workforce costs and it was voted the best of all former Communist Bloc countries in the overall ranking,” says Radka Novak, Head of the Landlord Representation department of Cushman & Wakefield’s Prague office.
Companies expanding into new locations
Prague has held a strong position in terms of companies’ interest in expansion. 34 new firms plan on coming here over the next five years. Only Moscow can boast more companies – 44 – heading its way. 28 companies are headed for Warsaw and Bucharest, and 27 for Budapest. Companies also consider countries in the east of the EU when deciding to move or outsource activities.
Up to 42% of companies contemplating such moves are headed for this region – the highest percentage of considered locations for the third consecutive year.
The key factors that companies evaluate when planning their location include availability of qualified workforce, easy access to markets and clients, quality of telecommunications, transport links, and workforce costs. The level of pollution of the city is the least relevant.
Impact of the credit crunch
When asked about their contemplated moves aimed at reducing the uncertainty arising from the credit crunch, the most frequent answers from respondents included increasing flexibility at work, concentrating activities within a single building, reducing the leased area or utilising it more efficiently, or moving to lower-cost premises (within one city or country).
“This more responsible approach to real estate will ensure that the demand for office space will not decrease significantly in the years to come, so a reduction in transactions cannot be expected. This is certainly good news for both developers and real estate agents,” Radka Novak says.
The green issues
This year companies were also asked if they occupied environmentally friendly or green buildings. Only 15 percent of the respondents currently do; another 45 percent are interested in it. 32 percent of companies show no interest in moving to a green building. Energy and water consumption savings are some of the most attractive benefits of green buildings – 35 percent of the responding companies think so. 19 percent believe that insufficient supply of green buildings and/or expected higher rent is the greatest barrier for moving.
The leading positions of London, Paris, and Frankfurt as business destinations are unlikely to change in the near future. However demand for regional cities are growing, primarily due to lower expenditures on the workforce and its relatively sufficient quantity, as well as frequent governmental policies aimed at attracting investments.
European Cities Monitor 2008: The best cities in which to locate a business today
Source: Cushman & Wakefield
For further information, please contact:
+420 234 603 710