Another positive press story this week was that in the thirty-fourth edition of the Global Financial Centres Index (GFCI 34) from the China Development Institute in Shenzhen and Z/Yen Partners in London, the gap between New York at the top and London in second is closing or the title of world’s leading financial centre.
For the fifth year in a row, New York sits pretty but the lead has narrowed. London is second, closely followed by Singapore and Hong Kong while San Francisco makes up the top five.
Interestingly, both Frankfurt and Paris, who had hoped to gain an advantage due in part to post-Brexit uncertainty and eclipse London, are way down the pecking order, in fourteenth and fifteenth respectively. Another fascinating aspect of the report is that the only other European city in the top ten—Geneva—is, like London, not in the EU.
David Schwimmer, CEO of the London Stock Exchange Group said that ‘Anything that is seen as negative commentary about London as a financial centre has become kind of clickbait’. It’s uncertain whether his friends agree.
Consultant to Aquis Exchange David Buik wasn’t surprised that London is a close second. ‘It must never be forgotten that London is the centre of the time zone, with the best lawyers and accountants in the world.’
He went on to say ‘Though IPO business has been very disappointing this year due to a dearth of deals, as has been the case relatively in New York, London’s prowess in foreign exchange and derivatives is all but peerless. London’s real competition comes from New York and the Far East. Without being disrespectful, European centres must continue to satisfy themselves in the role of spear carriers in the financial services arena.’
The GFCI is compiled using 147 instrumental factors, including regulation, rule of law, transport links, tax burdens, the state of the economy and the availability of capital and in the most recent report, New York was up three points on the March 2023 report to 763 points, while London was at 731 in March and today is at 744, a rise of 13 points.
But it’s close. Singapore in third is just two points behind London who themselves are a single point ahead of Hong Kong in fourth.
The cities in places six to ten are Los Angeles, Shanghai, Washington DC, Chicago and as we mentioned earlier, Geneva.
Promise, Prestige & Profits
Despite the considerable turbulence ushered in by Brexit and current geopolitical uncertainty, the London commercial property market remains resilient and robust. Investors continue to be drawn to the capital’s premium assets, underscoring the city’s enduring appeal and steadfast economic strength.
London’s commercial property market stands as a beacon of stability and growth potential, solidifying its position on the global stage as a prime investment destination. The city’s ability to withstand significant political and economic shifts proves that even with all its undoubted challenges, London’s commercial property market thrives and the city remains one of the world’s leading global financial centres.
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