London increases its lead over Paris as top city to locate a business in Europe
27 Sep, 2006, Europe
Barcelona overtakes Brussels to take fourth place in ranking of 33 top cities.
Warsaw can expect the biggest influx of international companies over the next five years.
The greatest impact on business over the next ten years is likely to be the growth of China's markets.
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London has increased its margin over Paris as Europe's leading city to locate a business according to European Cities Monitor (ECM), the annual location survey of Europe's leading companies carried out by global real estate consultant Cushman & Wakefield.
The UK capital is now the top-rated city for seven out of the 12 factors that are ranked to then give the overall league table. This year, London has improved its scores, among other factors, for availability of office space (rising to No. 1 slot having overtaken Berlin and Madrid) and moved slightly ahead of Paris to be the best city in Europe for internal transport.
European Cities Monitor is based on interviews with senior managers and board directors in charge of location of 507 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. Communication factors are seen as the most important, followed by cost and then quality of life.
James Young, head of the City of London office of Cushman & Wakefield, comments: "With the current trend towards globalisation, London has consolidated its position as part of the elite group of global cities, together with New York and Tokyo, and in all likelihood Shanghai in the near future. This puts London in a league apart when comparing it with other European cities."
In last year's ECM, London achieved a weighted score of 0.87, which has now increased to 0.91, while Paris' has gone from 0.60 to 0.59. Paris comes second for five of the factors. This year it falls in the rankings for quality of life (down two to 4th) and freedom from pollution (down three to 29th), together with losing its first place for internal transport to London, but improves for cost of staff, value for money and availability of office space, and languages spoken.
Last year Barcelona overtook Amsterdam to take 5th position in the overall ranking, which was the first time that the top five had changed since Cushman & Wakefield had first carried out the survey in 1990, when Barcelona was in 11th position. This year, Barcelona takes one more upward step to leapfrog Brussels and take 4th position, with Frankfurt retaining third place.
"The Catalan capital has been one of the fastest risers in the ranking since ECM was first launched in 1990," says Elaine Rossall, head of European business space research at Cushman & Wakefield. In addition, Barcelona comes top in terms of doing the most to improve itself as a business location. "This goes to support the view that the more a city is perceived to promote itself, the more it will be perceived as a good business location," adds Elaine.
Five of the cities in the top 16 business locations are in Germany. Hamburg is the biggest riser in the ranking, up three places to 16th, while Düsseldorf is up two to 14th. Martin Brühl, head of the German office of Cushman & Wakefield, says: "As well as demonstrating the consistent growth in Germany's general attractiveness, this shows the aptitude of individual cities in Germany in raising their profiles as excellent locations. This is due to the cities' independence within the federal system, which impacts on patterns of economic activity and creates a diversified marketplace."
This year the ranking has included three new cities: Birmingham (in 19th place), Leeds (28th) and Bucharest (29th). Meanwhile, Turin, Luxembourg and Valencia head the 'familiarity with other European cities' list.
Europe’s Best Cities to locate a Business – ECM 2006
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THE CHANGES IN THE TOP 20:
Up three places – Hamburg.
Up two places – Düsseldorf, Warsaw.
Up one – Barcelona, Dublin.
Down one – Brussels, Milan, Lisbon,
Down two – Geneva.
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No 1 positions for ...
Easy access to markets - London
Qualified staff - London
External transport links - London
Telecommunications - London
Cost of staff - Warsaw
Climate governments create - Dublin
Value for money of office space - Warsaw
Availability of office space - London
Languages spoken - London
Internal transport - London
Quality of life - Barcelona
Freedom from pollution - Stockholm
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Impact on business:
- The 'growth of China as a market for products/services' will have the greatest impact on companies' business over the next ten years. At the bottom of the list of nine factors comes 'conflict/terrorism'.
- Moscow is the city seen as providing the greatest business opportunities in the eastern cities outside the European Union (EU), followed by Istanbul and Bucharest.
- Nearly a fifth (19 per cent) of companies have relocated/outsourced to another country in the past 12 months, with new EU members, and China and India as favoured destinations.
- More than a fifth (21 per cent) of companies plant to relocate/outsource to another country in the next two years (up from 17 per cent in last year's survey). Again, new EU members are the favoured destinations, along with China and India.
- Warsaw can expect the biggest influx of new companies over the next five years, with 50 of the 507 sampled companies expected to locate there, whether offices, manufacturing or sales outlets.
- Paris is No 1 for existing representation.
- Regarding new global locations, Shanghai comes top followed by Beijing and São Paulo.
- London and Paris remain the best-known cities as business locations.
- Barcelona, Madrid and Prague are seen as the cities doing the most to improve themselves as business locations, with Berlin making great strides this year, leapfrogging Budapest, Warsaw and London to take fourth place.
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Notes to Editors: