Wednesday 22 November 2017

Dublin is ranked fifth in EU for financial services

Dublin is now ranked fifth among Eurozone financial services centres, according to the latest Global Financial Centres Index
Dublin is now ranked fifth among Eurozone financial services centres, according to the latest Global Financial Centres Index

Donal Buckley

Dublin has been ranked fifth among Eurozone financial services centres, according to the latest Global Financial Centres Index (GFCI 21). This high ranking should help Dublin to compete for thousands of financial services jobs that are expected to leave London after Brexit.

Agents Knight Frank estimates that as many as 13,000 of those jobs could come to Ireland. However, the competition will be tough.

Meanwhile, estate agents JLL Ireland said Dublin has now moved from 15th into seventh position as a location for world-class property investment. "As pricing has intensified in many of the larger global cities, 'New World Cities' such as Dublin have increased their profile to investors as they are perceived to have better value. Dublin is a consistent, liquid market that has open and transparent operating processes, with dynamic clusters of business activity. It offers scalable real estate investment opportunities, and is punching above its weight in terms of attracting real estate for a market of its size," says Hannah Dwyer, head of research at JLL Ireland.

"This rise in Dublin's ranking in the last decade has happened through technology advancements and its ability to transform and adapt to a constantly changing socio-economic landscape," added Dwyer.

Dublin was also ranked fifth in JLL's index for cross-border investment intensity, just behind Frankfurt in third and Munich fourth.

Meanwhile, among global financial centres the Eurozone cities of Luxembourg, Frankfurt, Munich and Paris are ahead of Dublin, which in turn is ahead of other competing Eurozone centres including Amsterdam, Warsaw and Brussels.

In the wider global market, the GFCI shows that Tel Aviv and Abu Dhabi have overtaken Dublin, and the Irish capital has dropped two places to 33 in the global index that examines 88 cities around the world. Asked which global centres are expected to become more significant in the next few years, respondents to GFCI ranked Dublin as high as eighth with Luxembourg trailing in ninth.

The GFCI 21, which is compiled by The China Development Institute and Z/Yen Partners, also shows Dublin soaring in terms of reputation, up 15 positions to 13th in the global index and the only Eurozone city to make it into this elite top 15 global financial centres in terms of reputation. However, Luxembourg is the only Eurozone city to make the elite 15 when ranked in terms of human capital and business environment.

GFCI rankings are based on five broad factors of competitiveness: Business Environment, Human Capital, Infrastructure, Financial Sector Development and Reputation. Tax and cost competitiveness, including real estate rents, is just one of 20 sub-sectors within these criteria.

Brexit was a major concern among those surveyed, especially the uncertainty for all centres - not just London. Nevertheless the UK capital retained its position as the world's number one financial centre, with Singapore narrowing the gap and ranked number three.

Even before last week's terrorist attack on Westminster, terrorism, personal safety and human rights are becoming ever more important among respondents to the GFCI online questionnaire.

In an analysis of how well connected a centre is, how broad its services are and how specialised it is, Dublin was ranked third among global leaders because of its breadth and depth of financial services activities as well as its connectedness with many other financial centres. Frankfurt was fourth and Paris was ninth among these global players. Much of the competition between Eurozone countries for financial services arises because some London-based banks will lose their rights to provide financial services within the Eurozone if the EU negotiates a hard Brexit.

An analysis carried out by John Ring of Knight Frank as part of the agency's Dublin Office Market Review and Outlook for 2017 suggests that Dublin could gain up to 15pc of the financial services jobs leaving London post-Brexit. Ring's projection is based on statistics gleaned from a range of sources, including the European Parliament, the British Banking Authority (BBA) and the Brussels-based 'think tank', Bruegel.

With 262,500 of the UK's financial services 1.05m workforce engaged in wholesale banking according to the BBA, Bruegel estimates that one third of this activity (87,499 jobs) will migrate to the EU 27 member states. Having examined those numbers, Ring predicts that 15pc - or 13,125 of these jobs - will come to Dublin.

Meanwhile, a number of Irish developers have been pitching their new office developments to both Irish and international firms in a bid to capture some of this international financial business. In a recent article for in the UK's Property Week magazine, Hibernia Reit CEO Kevin Nowlan, said: "We are well placed to cater for Brexit- related demand."

He said: "Should Brexit demand test the limits of the supply that is currently in the pipeline, Dublin has the ability to be far more fleet of foot than some of its European competitors. The city has around 3.5m sq ft of new grade-A office space that will be delivered over the next two years - about 2m sq ft in 2017 and then another 1.7m sq ft in 2018.

"Our experience to date suggests many organisations considering moves don't feel they can wait to see the final terms of Brexit before making initial relocation decisions, so we may start to see firm requirements from some in the near term."

Nowlan argued that Dublin "makes sense on a lot of other levels" for companies seeking a post-Brexit base.

"As a result of our history, we have a common law system, as does the UK, making Dublin an obvious place for any business that trades internationally. Culturally we're not that different. If you're looking at moving to Paris or Dublin, Dublin is going to present far less of a culture shock to people," he said.

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