Warsaw cheapest among European financial hubs
Office & mixed-use developmentjournalist
The report compares twelve selected destinations for companies looking for workspace in Europe, ranging from the global megacity of London to the much smaller, 'specialist' cities of Frankfurt and Warsaw.
“Warsaw is just over a quarter of the cost of London. In some cities, this expense ranking is likely to change. Workspace rents are forecast to rise over the next year in Amsterdam, Dublin, Paris, Madrid, Milan and Stockholm. They are broadly stable in Brussels, Frankfurt, London and Warsaw, giving occupiers more certainty on real estate costs,” states the report.
Warsaw also tops the list for the growth rate of the finance sector. In the decade between 2006-2016, the Warsaw financial sector grew 123 pct in terms of gross value added (GVA) and 57 pct in terms of jobs. At the same time some European cities like Frankfurt, Berlin and Madrid saw their financial sectors shrink. “The recent rise of the finance sector in centres like Moscow, Warsaw, Milan or Brussels points to a trend that was already in train. These cities have increasingly been acting as financial service hubs for a single country or particular localised sectors and their growth suggests that the dispersal of Europe’s financial industry has already begun. Many financial companies were already offshoring, nearshoring or even reshoring some of their activities before June 2016. As a consequence, the small and specialised financial centre of Frankfurt is actually 2 pct smaller in GVA terms than it was ten years ago and London’s growth in the last decade has been much slower than it was in the previous one,” states the report.
Warsaw, however, is not on Savills’ shortlist of cities that are most likely to steal London’s financial crown after Brexit. According to the company Europe’s most likely alternatives are:
1. Amsterdam – due to its cultural attractions and knowledge of the English language
2. Dublin – because of its corporate tax framework and use of English
3. Madrid – because of its global scale and cultural attractions
4. Frankfurt – as the financial services centre for Europe’s biggest economy and the home of the European Central Bank (ECB)
5. Paris – due to its size and status
Warsaw's strengths include its overall accomodation costs, its short-term rental prospects and its overall tax regime, while the city's demographics are its main weakness, say Savills.
Warsaw is ranked third in terms of ‘the ease of doing business', after Dublin and London. Poland boasts the second lowest corporate tax rate in Europe at 19 pct (after Ireland), and the second lowest top income tax rate at 32 pct (after Moscow).
In the decade between 2006-2016, the Warsaw financial sector grew 123 pct in terms of gross value added (GVA) and 57 pct in terms of jobs.
Warsaw's workforce is forecast to grow by 4 pct between 2016 and 2026, which is two percentage points below the European city average.
According to the research annual residential costs per employee come to over EUR 16,500 per year while the workspace costs come to just over EUR 5,500. Warsaw is just over a quarter of the total cost of London.
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