Brexit: A new dimension in corporate Real Estate strategy

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Brexit: A new dimension in Real Estate Location Strategy

Opportunities for continental Europe in the short run

The recent UK leave vote causes profound implications for the climate for business in the UK. Corporates with subsidiaries in the UK re-evaluate their location, especially when it comes down to European Headquarter (EHQ) functions. Whether or not this will result in actual relocations is yet to be seen, but the first London based corporates are evaluating their options.

Brexit: A new dimension in corporate location strategy

The recent UK leave vote marks a historic shift in Britain’s place in the world with profound implications for the climate for business in the UK. The UK vote to leave the EU signifies the start of an untested negotiation process with unknown consequences for individuals and organisations. Areas where implications could be observed include the freedom of movement for goods, people and capital with adoption of new tariff and quota structures. It is these unknown consequences and uncertainty that make corporates with subsidiaries in the UK re-evaluate their location, especially when it comes down to European Headquarter (EHQ) functions. Whether or not this will result in actual relocations is yet to be seen, but the first London based corporates are evaluating their options.


Opportunities for continental Europe in the short run

The unknown consequences of the Brexit, the long period of uncertainty during negotiations and the implications for the business and the future location is a top priority for corporates’ board. In the short run, this uncertainty is likely to result in a re-evaluation of the current footprint and increased interest of London based corporates in continental Europe. Many are considering their options and request independent and objective analysis of their holdings compared to moving them to another country, With Brussels and Paris still recovering from the recent horrible terrorist attacks, cities with an established international community in countries like Netherlands, Germany and Ireland are in pole position to attract the EHQ functions.

Praised for its educated, multi-lingual and multi-cultural talent base, its unrivaled international (airport) connections, focus on innovation and its recreational and cultural diversity, both the Amsterdam metropolitan area and the Rotterdam – The Hague metropolitan region offer a variety of high end office locations appealing to international corporates. Add to this the business minded / cooperative attitude of the Dutch tax authorities providing legal certainty regarding tax compliance, and current interest for the Netherlands as a future EHQ location can easily be explained.


The playing field is open in the long run

Although the benefits for continental Europe in the short run seem to be evident, the long run is a slightly different story with a changed regulatory landscape. After leaving the EU, Britain might no longer be bound to European regulation and legislation around taxation and incentives, providing opportunities to re-establish an attractive business climate. Still, this will be a Britain outside the EU.

At Deloitte, we are seeing an increasing demand for independent analysis of the current Real Estate footprint of our international clients. Within Deloitte we have an established Business Location Strategy team providing objectvie guidance just in these times and for these questions.


More information 

Want to know more about the consequences of the Brexit for the Real Estate sector or about Business Location Strategy? Please contact Sjors Berns via +31 (0)88 288 3206.

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