European cities hunt for London jobs

As London's financial sector prepares for Britain's exit from the EU, cities like Frankfurt, Dublin and Paris are working to attract firms looking to relocate.

Hubertus Vaeth is not about to let a good crisis go to waste - writes news.com.au.

With London-based banks, insurers and asset managers scrambling to prepare for Britain's exit from the European Union, he's putting out the welcome mat for anyone looking for a new EU base.

Vaeth, who heads Frankfurt's financial services trade association, estimates 10,000 jobs could move to the German city from London as a result of the impending upheaval.

He isn't concerned that some see him as a vulture.

"I was once called a Frankfurt wolf in sheep's clothing, which I took as a badge of honour," Vaeth says during a visit to London.

"Yes, I'm taking jobs away. But those jobs are not remaining here if I wouldn't do it. ... So it's not me taking them away; it's me directing them to Frankfurt as they go anyway."

Pressure is growing by the day on financial firms with EU bases in London to decide when to activate their Brexit contingency plans.

The biggest question is how many jobs to move out of London and where to move them, as the companies are concerned their ability to do business across the EU's market of 500 million people may be restricted after the UK leaves the bloc in March 2019.

But Britain's negotiations with the EU about a future relationship are painfully slow.

Amid the growing unease, cities like Frankfurt are pressing their case.

So far, the German city is neck-and-neck with Dublin in grabbing business, according to data released late last month by the global consulting firm EY.

The company, which tallies the public statements of 222 of the largest financial service firms on its "Brexit Tracker," says 13 have confirmed they are moving staff or operations to Dublin compared with 12 for Frankfurt.

Luxembourg is third with six.

"The industry is still getting ready for a cliff edge," said Omar Ali, EY's UK financial services leader.

He said it's too early to say if the British government will be able to secure a two-year Brexit transition period, which would give firms more time to adapt, and whether that would affect their decisions on jobs.

"At this stage firms are still only moving what they have to."

Ali put that number at around 1,500 jobs so far.

But EY estimates that as many as 13,000 jobs from these 222 businesses are at risk.

Some executives estimating as many as 100,000 leaving London in the long-term. Some 2.2 million people work in British financial services and related professions, according to the industry association, TheCityUK.

In cities like Frankfurt, there is some early evidence of this impending shift in jobs.

Demand for prime office space has risen in each of the past three quarters, pushing rents higher, according to a report released November 1 by Vaeth's group, Frankfurt Main Finance.

The report is based on data from four large commercial real estate companies - BNP Paribas, Colliers, Jones Lang LaSalle and Savills.

By contrast, London's real estate market is weakening.

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