As of today, ‘Brexit‘ is in full swing.
Wednesday 29th March 2017 has gone down in history as the day when UK Prime Minister Theresa May triggered Article 50 of the Lisbon Treaty, thereby formally beginning the UK’s departure from the European Union.
With two years in which to complete the process, the UK is expected to have left the EU by the summer of 2019. Until then, how will the flexible workspace industry react? Will demand fly or falter? Do European cities stand to lose or gain?
In general, flexible workspace operators around the UK responded positively to the Brexit vote, based on the assumption that businesses turn to flexibility – and flexible workspace – during times of uncertainty.
However, some analysts believe that London will experience a fallout as firms begin to look overseas for new headquarters within EU cities.
European cities set to gain from ‘Brexodus’
Relocation service company, Movinga has published a Brexit City Ranking chart to understand which locations may be the most likely to gain from the ‘Brexodus’.
Split between banking firms and startups, the research breaks down various elements such as number of local coworking spaces, comprehension of the English language, cost of living and flight times from London.
Berlin in Germany comes out top for startups, followed by Warsaw (Poland) and Budapest (Hungary). For British bankers, Dublin in Ireland makes the No.1 spot followed by Amsterdam (Netherlands) and Valletta (Malta).
“Everyone is talking about cities like Paris and Frankfurt preparing for an influx of banking industry workers due to Brexit,” said Movinga’s Managing Director Finn Hänsel. “But other cities like Dublin, Valletta, Luxembourg and Amsterdam may actually be better equipped to make these workers feel happy and at home.
“Individuals and businesses alike should consider the unique factors important to their relocation before planning their move.”
Other sources, however, feel differently.
Among them, GlobalData has produced a new report – “Attracting business from London after Brexit: Can Paris, Dublin, Frankfurt or Amsterdam become Europe’s new financial center?” – which claims that Paris in France is destined to become the financial capital of Europe after Brexit.
“Paris stands out not only because it is replete with office space, but also because it ranks far above its competition in terms of its social characteristics,” says Sean Hyett, Associate Analyst for GlobalData Cities.
“While London’s cultural pull is partially why it has thrived for so long, the French capital offers a population larger than its three competitors combined along with all the social luxuries workers would require for a high quality of life in the city.”
The report claims that Paris comes out ahead of its three nearest competitors, Dublin, Frankfurt and Amsterdam, because it excels in “social attraction” and has a vast amount of available workspace – “over four times the amount of available office space for immediate use than Amsterdam, Dublin and Frankfurt combined”.
It’s also home to Europe’s second busiest airport. Flight times between London and Paris are approximately 1 hour 20 minutes, with more than 20 flights per day on average.
Hyett continues: “Despite Dublin’s preferable tax rates and advantage over other cities due to its English-speaking population, Paris appears to be the favourite city to attract financial firms out of London following Brexit. It has by far the largest economy out of the other four potential cities, and produces the largest output from financial intermediation and real estate, both in absolute terms and relative to the size of the economy.
“However, the city falls down when it comes to its stringent regulatory systems, which explains why Paris has never rivalled London historically as a financial centre, and why Frankfurt has developed as a key financial hub.
“Indeed, all four cities offer benefits to attract businesses, but none excel in all aspects. For this reason, GlobalData predicts that while Paris is a strong rival, London is unlikely to lose its status as the financial heart of Europe in a post-Brexit environment.”
All things considered, Brexit is more than likely to shake up the European workspace market. But as for the specifics, such as which city will gain or whether London will rise above the competition, no amount of predictive data can give us concrete answers.
The UK’s extraction from the EU is unique. It has never been done before. These are unchartered waters for sure – but we can be confident that the flexible workspace market will benefit, in one way or another, as businesses across British cities and indeed across Europe prepare for the fresh challenges – and opportunities – that lay ahead.
Featured image: Stocksnap