Nery Alaev discusses London and Paris post-Brexit.
London is no longer the top real estate market in Europe, according to a new report, having lost its title to Paris for the first time in four years.
Further to this, it seems that regional UK cities such as Birmingham and Manchester are set to suffer from Brexit backlash as well. The research was carried out by US investment firm La Salle and reported by City AM.
I’ve decided to investigate and conclude on this story today.
The UK capital has suffered as the French capital has strengthened thanks to recent reforms to labour laws in the country – this has helped French officials to position Paris as a viable alternative to London for bankers and start-up heads.
It’s not just France however, Germany has also been utilising the city of Frankfurt’s financial prowess to attract new business.
For example, I wrote about Frankfurt in September and raised the issue that there may not be enough space to accommodate fleeing companies. I also wrote about the new competition, in which Frankfurt is involved, for the Fintech ‘throne’ in Europe post-Brexit.
Ironically, political uncertainty is a factor that is limiting increased investment into Europe – Brexit undoubtedly plays a role in this. Mahdi Mokrane of La Salle says:
„Political decisions – rather than just the macro economy – have changed the outlook for many cities this year. Investors are questioning the economic future of markets where economic uncertainty prevails.“
On London, Mokrane states:
„The uncertainty surrounding the UK’s future trade relationship with the EU is dampening economic prospects in the UK, even though London and the rest of the south east remain strong in a European context thanks to a diverse economy and high human capital.“
In summary it appears that London hasn’t been the only city and the UK hasn’t been the only country shaken by Brexit – maybe companies will go even further away to Singapore or New York.
Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria.