Despite the Brexit process being triggered, London is looking remarkably resilient in terms of business investment, and the outlook remains positive. Tech companies have received funding of 1.1 billion pounds in just six months, 4 times more investment than the whole of 2013, and double that of any other European city!

Google and Facebook have also committed to increasing their presence in the capital, with little sign of a mass exodus appearing. The reason for their continuing confidence is due to a range of deep rooted factors, which will make a European relocation simply too expensive and impractical for many large corporations:

Talent Pool

London is home to possibly the best pool of talent on earth. There are four UK universities in the World's top 10 - two of them are based in the capital, while the others (Oxford and Cambridge), are less than 70 miles away. This gives companies access to a formidable range of skilled individuals, and is a major reason why London is the leading innovation centre - ranking alongside Singapore.

If a company relocated, their business could suffer from decreased creativity levels, which would obviously affect future earnings. In addition, generous relocation packages for employees would have to be paid, resulting in another unnecessary cost.

Business Friendly Environment

The capital has a business culture that is embedded in its infrastructure, with a host of benefits for resident companies. London has one of the leading legal systems in the World, and enjoys a robust and fair process of law. With a distinct lack of corruption, businesses can be sure of getting a fair hearing in any legal disputes.

The UK corporation tax rate is also an attractive feature. Currently standing at 19%, from 2020 the tax level will be 17%, significantly less than other major European cities (both France and Germany have levels exceeding 30%).

Transport is another enticing reason to stay. With 3 International airports, the Channel Tunnel, and an underground tube network, London is a super-connected hub, within easy reach of UK cities and countries around the World.

Established Financial Centre

For the financial markets, reliability and stability are king. Any large scale disruption has the potential to trigger an economic tsunami.

London's banking system has been developed over decades, and switching this to another city over the short term is an impossible dream - many European countries are as reliant on the city as the UK (half of the equity and debt raised for European Governments is processed in London!). In addition, 1 trillion Euros are exchanged in the city every day, meaning that any instability will affec tall our economies.

Aware of the chaos a move away from the capital could cause, even Germany's Finance Minister has acknowledged that London should stay as a financial powerhouse.

When considering the numerous benefits that London retains, it becomes clear that a switch to mainland Europe is an unnecessary and risky strategy for most companies. In fact, recent research shows that as a location, it simply has too much going for it to justify an expensive move away.

Pall Mall Estates have a wide range of low cost commercial properties across the UK. Take a look at our available spaces here or get in touch with our experienced team here.

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