European Cities Monitor 09

HIGHLIGHTS FROM THE FINDINGS

The leading cities for business
>>London, Paris and Frankfurt remain the top three cities for
business. These three cities have held the top three positions
since the survey started back in 1990. This year London
extends its lead slightly on Paris, although the top two cities
are still comfortably ahead of the nearest challengers.
>> The top five cities remain the same overall, but Barcelona
edges above Brussels into fourth place with an improved
score over the year.
>> Birmingham is the biggest mover this year, rising up the
ranking by seven places to 14th place. The other cities to
move up this year are: Madrid (7th to 6th), Munich (9th to
7th), Milan (13th to 10th), Hamburg (17th to 12th), Rome
(25th to 22nd), Leeds (28th to 24th) and Istanbul (29th
to 27th).
>> A number of cities fell in the overall ranking including:
Amsterdam (6th to 8th), Zurich (10th to 13th), Düsseldorf
(12th to 15th), Manchester (14th to 16th), Dublin (15th to
18th), Prague (19th to 21st) and Budapest (22nd to 26th).
Key factors in deciding where to locate
>> The top four factors remain some way ahead in terms of
their importance, although the order has slightly changed
this year.
>> Easy access to markets, customers or clients replaces availability of quality staff as the most important factor.
These two factors are followed by quality of telecommunications which edges further ahead of
transport links with other cities and internationally.
>> In the current economic climate, it is no surprise that value for money of office space is increasingly significant for occupiers, with 34% of companies regarding the factor as the most important, up from 26%.
>> London remains the top rated city in half of the 12 major rankings, including easy access to markets, transport links with other cities and internationally, ease of travelling
within the city, availability of qualified staff, quality of telecommunications and languages spoken.
>> Bucharest is now perceived to be the least expensive location in terms of the cost of staff, with Istanbul second and Budapest third. Leeds is now joined by Birmingham in first place for value for money of offices, with Warsaw now third.
>> Dublin again comes top for the climate created by government, while both Barcelona and Berlin retain the top position for quality of life and availability of office space respectively. Geneva replaces Oslo as the best city in terms of freedom from pollution.

Impact on business
>> Companies were asked which of a series of factors is most likely to impact on their business over the next ten years.
The performance of the European economy is regarded as having the greatest impact on business over the next ten years. Almost a quarter of all companies feel it is the most influential factor.
>>The credit crunch or availability of corporate finance almost doubles in terms of the number of companies that feel it will have the greatest impact on business over the next ten years, rising from fifth to the second most important factor.
>> As a result, the impact of economic growth of Eastern Europe lessens compared to last year and declining by almost the same amount is the growth of China as markets
for products and services.
>> It has been a tough year for corporates across the region and business sentiment noticeably weakened over the year, with half of companies less positive than a year ago.
Nevertheless, a quarter of respondents are slightly more positive than 12 months ago, as a number of companies start to feel that the worst of the economic difficulties are over.

Company expansion
>> Companies are still expecting to expand across Europe over the next five years, although the numbers are noticeably reduced from last year. Central and Eastern Europe (CEE) remains a popular destination with Warsaw replacing Moscow as the city expected to see the largest influx over this period.
>> Other CEE cities that can expect interest from significant numbers of companies include Bucharest and Budapest.
Of the more established business cities, Paris and London remain the most popular destinations for European expansion.
>> The number of corporates anticipating global expansion is down on 12 months ago. New York can expect the largest influx of companies globally, with Shanghai now the second most popular global destination and São Paulo third. Beijing sees its popularity decline markedly from second place in 2008 to seventh in 2009.

City promotion
>> London, Paris and Barcelona retain their positions as the best known cities in Europe. Brussels and Frankfurt are now tied for fourth place. The proportion of those cities that are known very or fairly well dropped again, with only the top 8 being known very or fairly well by at least half the companies sampled. This highlights the requirement of cities to promote themselves to a greater degree especially in the current difficult economic conditions.
>> Barcelona continues to lead the way in terms of cities promoting themselves, although the gap is closer between the new second placed city, London, which rises from fifth in 2008. Berlin also moves up by three places over the year and is now third. Madrid and Prague fall to fourth and fifth places respectively.

source: Cushman & Wakefield