European Cities Monitor report

London, Paris and Frankfurt remain the top three European citiesin which to do business overall, according to a survey by global property consultant Cushman & Wakefield. Amsterdam has scored strongly this year, continuing the movement seen in 2010 to climb up to 4^th place from 6^thplace. Berlin also performed well and moved into the top five, up two placesfrom 7^th position last year.

Inits 22^nd year, the European Cities Monitor report is basedon 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 ‘bestfor business’ and the ‘best city in which to locate a business today’. In additionto this, 36 cities are ranked against criteria such as quality of life, accessto markets, availability and quality of staff, cost of office space,telecommunications and transport links.

Moscow has been ranked the most desirable European city for companies toexpand into for the second year running. The number of European companies whichexpect to locate in Moscowwithin the next five years has jumped to 57 from 47 in 2010. Moscow has also risen significantly in theranking of best European cities in terms of easy access to markets. This yearit takes 11^th position, up from 19^th in 2010.

 Tim Millard, Managing Director of Cushman & Wakefield in Russia, said, “Moscow remains the mostattractive city for future corporate expansion in Europeand is considered more than twice as important as the second place city as adriver of future corporate growth. This is being accelerated by very strong expansionin consumer spending, with the potential for this to be leveraged upconsiderably due to the current low levels of penetration of consumer credit,strong growth in B2B sales and large potential in regional cities beyond thetraditional powerhouses of Moscow and St Petersburg.

“All ofthis activity is underpinned by strong GDP growth, continued high oil and gasprices and a very healthy level of foreign currency reserves. This growth incorporate activity will drive the next commercial property cycle and will givethe bold investor the opportunity to earn significant returns from both incomegrowth and capital appreciation.”

There was also a large rise in the number of business leaders expecting to locate in Berlin. 23 respondentscited Berlinas the most favourable city in which to expand, almost double that of 2010(12). Germany has morecities in the top 10 than any other country; Frankfurt (3^rd), Berlin (5^th) and Munich (9^th).

Martin Brühl, Managing Partner of Cushman & Wakefield inGermany, commented, “A variety of factors have led to Berlin’s risingimportance over the past three years and to its excellent result in this year’sranking. Berlinis a bustling city. Its cultural infrastructure is second-to-none in Germany. Fromopera to flourishing theatres, from film festivals to museums and galleries.It’s all there. The city’s educational landscape, with its renowneduniversities 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 leasingconditions and as the city’s promotion of itself as a business location isstrong 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 Europeancities in which to do business, moving up eight places from 35^th to27^th position.

Andrei Birsan, Head of Office Agency, Cushman & Wakefield in Romania, said, “Bucharest offers high-class office buildingswith very attractive financial terms. These are important factors for companies looking to lease new premises for their business, or relocate their currentoperations. Recently, Bucharest’s infrastructure has been improvedand there are plans for further development. This will improve accessibility for the business centres year by year. Thereduced costs, quality and availability for office space make Bucharest more and more attractive for companiesto develop their businesses in.”

Jan Willem Bastijn, Managing Director of Cushman & Wakefield in Amsterdam, commented, “Despite the uncertain economic times,international corporates still perceive Amsterdamto 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 fundamentalst hat 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 topthree cities is decreasing considerably. London,Paris and Frankfurt have been in the top three rankingever since the survey was first undertaken in 1990 but cities such as Amsterdam and Berlin arenow judged as being almost as attractive as Frankfurt.”

London is rankedthe number one city in six of the 12 major categories: easy access to markets,customers or clients; availability of qualified staff; transport links withother cities and countries; quality of telecommunications; languages spoken;and internal transport. However, it scores poorly on the cost of staff and officespace, and levels of pollution.

JamesYoung, Head of Cushman & Wakefield’s London Group, said, “Over the last fewyears London has retained its position as Europe’s principal business andfinancial 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 attractiveenvironment for businesses of all sectors to operate in. Of particular concernis the banking and finance sector, with the political, regulatory and taxpressures that exist. London’shealth depends on ensuring that the “City” retains its status as the number oneEuropean, if not global, financial centre.”

Gordon Innes, CEO of London & Partners, the official promotionalagency for London, added; “The results of thisreport confirm that Londonremains the best European - if not global - city in which to do business. Sinceour establishment in April of this year, London & Partners has continued topave the way for international companies looking to expand or set up in the UK capital, and we are delighted that the reportalso recognises our work in promoting Londonas the best city in the world to live, study and invest. London & Partnersis dedicated to continuing this good work to ensure that Londonretains its status as Europe’s principalbusiness and financial hub.”

Warsaw has risen three positions, from 24^th to 21^stplace of the best European cities to do business in. It is the top location for‘value for money of office space’ and takes third place in the ranking of topEuropean cities in which to expand.

Hanna Gronkiewicz-Waltz, Mayor of Warsaw, said, “We have been committed tocreating an investor-friendly environment in Warsaw for many yearsby investing in public transport, road system, information andcommunication infrastructure, as well asimproving the efficiency of the municipal offices. We are pleasedthat our initiatives are appreciated by international companies andinstitutions.”

The top four factors for companiesdeciding 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%).

                                                                                                   Source:Cushman & Wakefield (full ranking contained in the report)