[URBAN NOTE] Bloomberg View on the cities that will compete with London

[rfmcdonald]

Bloomberg View's Mark Gilbert writes about the advantages, and disadvantages, of London's different Eurozone competitors for its financial industry. Paris seems to come out broadly in the lead.

Have you heard? The platforms of London's St. Pancras train station and the departure lounges of its airports are packed with anxious investment bankers, ordered by their employers to relocate following Brexit.

Of course, that isn't happening at all; the U.K. decision to leave the European Union hasn't prompted an overnight exodus. But the banks that warned they'd consider moving thousands of staff out of a non-EU Britain are surely assessing "the next two weeks, two months and two years," as consultancy firm KPMG put it when appointing one of its senior partners to be head of its new Brexit division. "The French government, the German government, a number of governments, are making, if I may call it this way, a case for people to move to their jurisdiction," UBS Chief Executive Officer Andrea Orcel said on Tuesday. So which competing financial center looks most attractive?

On cost-cutting grounds alone, there are a number of options. London regularly vies with Hong Kong as the most expensive world city for renting office space. It ranks second according to figures compiled by real-estate firm CBRE for the first quarter of this year, with Paris 14th, Dublin at 30th and Frankfurt down at 47th. For a bank seeking a cheap European office, Frankfurt and Luxembourg look the best bets:

For a human resources department seeking the best overall environment for its employees, Frankfurt also looks attractive. In its annual scorecard of cities based on overall quality of life, including considerations such as political stability, economic backdrop, personal freedom and school systems, the consulting firm Mercer ranks the German financial capital as the seventh best place to live. Its 2016 ranking of 230 cities puts Luxembourg 19th and Dublin 33rd[.]

Bankers ordered to relocate can anticipate lower housing costs wherever they end up. For city-center apartments, London is the second most expensive city in Europe after Monaco, with Paris third at almost half the cost, and Luxembourg 10th. Frankfurt and Dublin, though, are even cheaper[.]