Scotland to set up Berlin office to boost trade links after Brexit

By Elisabeth O’Leary
GLASGOW, Scotland Oct 15 (Reuters) – Scotland will set up a trade office in Berlin, boosting its trade departments in readiness for all possibilities, including Scottish independence, after Britain leaves the EU, First Minister Nicola Sturgeon will say on Saturday.
The Scottish National Party leader has raised the nation’s profile since June’s European Union referendum in Britain, seizing on a new openness towards Scotland in Europe since most of its population voted to remain in the bloc.
Britain as a whole, however, voted to leave, a clash which has reignited talk of a split between Scotland and the rest of the United Kingdom, even though Scots rejected separation just two years ago.
“Creating jobs, expanding the economy and growing tax revenues – these priorities must be at the centre of everything we do,” Sturgeon will tell the SNP conference at its close, according to a draft of her speech.
She will add that economic stability is threatened by the prospect of the UK leaving the European single market, taking Scotland with it. Scotland wants to keep as many of the advantages of single market membership as it can, even if Britain leaves, and is looking for a bespoke deal with London to do so.
British ministers have suggested that the UK could leave the EU’s single market for goods and services to let them reimpose stronger control over their borders. The comments have driven the pound to its lowest level in three decades.
Sturgeon will say that in order to protect business in Scotland, the devolved government will set up a board of trade, a new trade envoy scheme, expand its Scottish enterprise agency and establish a Scottish trade hub in Berlin.
Business minister Keith Brown has said that he has seen a more neutral stance from businesses who were opposed to independence in the past but are supportive of Scotland’s desire to stay in the single market.
“After the (political) mess that has followed the (Brexit) vote, business is desperate for clarity and leadership,” Kate Forbes, a Scottish lawmaker at the conference, told Reuters.
She said that businesses are positioning themselves for all options after Brexit.
Sturgeon announced on Thursday that the Scottish government would publish a blueprint next week for a possible new independence vote. However, she has not said if or when the bill would be presented formally to the Edinburgh parliament.
Support for independence has barely moved since Scots rejected it by a 10 point margin two years ago. But the conference supported a motion on Friday which said Scotland “should prepare for a second independence referendum and seek to remain in Europe as an independent country.” (Reporting by Elisabeth O’Leary; Editing by Andrew Bolton)

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Berlin rising for residential

By Mike Hilton
It’s easy to forget quite how young Berlin as a capital city is. It is still less than 30 years since the demolition of the Berlin Wall, a defining moment in modern European history, perhaps matched only by the UK’s decision to leave the EU.

Since then, the city has grown rapidly: the economy, employment and income have accelerated, with little signs of slowing down as shown by Property Week’s recent report into the city’s post-Brexit opportunities.

Now firmly entrenched as the country’s political centre, business is growing in all sectors, helped by an increasing culture of entrepreneurship.
This has led to strong employment growth which is outstripping the rest of Germany and causing many to flock to the city. Last year Berlin’s population grew by 47,000 and this year is set to eclipse that with 42,000 moving to the city in the last six months alone.
This influx of people, 60% of which were from other European cities, has put even greater pressure on the supply of housing in the capital and a significant supply-demand imbalance now exists.

There are other factors adding to this shortage of housing; in Berlin there is a clear trend towards single person, rental households with an average of 1.8 people per apartment, with around 80% renting. If you were to combine this with the population growth, the calculated new demand sits at around 20,000 new units per annum in order to satisfy the city’s needs.

Slow rate of supply
However, since the early 1990s, there has been virtually no privately financed construction and the rate of new supply continues to fail to meet the considerable demand for homes. 7,000 units were built in multi-family homes in 2015, the majority of which were condominiums at higher price levels.

Condominium prices have doubled since 2010 and by almost 10% in the last year to €3,320. Both are still far below the price levels of other European cities, with a lot of catching up to do – rents for example are still only a quarter of the price they are in London.

Over the last eight years that Phoenix Spree have been investing in Berlin’s residential market, there has been considerable investor interest in the market, attracted by the mix of stable income growth, the potential to modernise and to capture the uplifts from reversionary rental growth as well as the opportunities for increased returns provided by sub-dividing multi-apartment assets for condominium sales.

However, the market remains very fragmented as many buildings remain in private ownership and in need of extensive refurbishment. This, combined with the potential for growth, property values below the cost of construction, underpinned by low interest rates, investor interest remains healthy. It’s no surprise.

Berlin, after years of relative inactivity, is still healing from the effects of its reunification, but is one of the most exciting European cities.

Mike Hilton, Phoenix Spree founding partner

Singapore Startup WB21 to Leave London for Berlin After Brexit

Three months after Britain’s vote to leave the EU, seven firms are moving from London to Berlin

BERLIN—Singapore’s fintech firm WB21 Pte. has decided to move its European head office from London to Berlin, one of the first startups to quit the U.K. in favor of the German capital after Britain’s vote to leave the European Union.

“Brexit was decisive for us. We had initially planned to operate our European business out of London, but the decision means we lack legal certainty there,” said Chief Executive Michael Gastauer on Friday.

WB21, which launched late last year as a payment service provider, said it would create 200 jobs in Berlin that were initially slated for London. Of WB21’s current 25 positions in London, 20 will go to Berlin. The fintech startup, based in Singapore, offers accounts and international money transfers. As of mid-September, it counted 1 million customers and had sent cross-border payments totaling more than $5.2 billion.

The Brexit decision in June fed expectations that companies with U.K. operations could relocate to avoid losing access to the EU single market, and a number of cities began lobbying companies, including Frankfurt, Paris and Dublin. According to accounting firm KPMG, three-quarters of British chief executives are considering moving headquarters or some operations from the U.K. in response to the Brexit vote.

But an exodus hasn’t materialized, with most decisions pending the outcome of negotiations on the relationship between the U.K. and the EU, which have yet to begin. In addition to uncertainty about trade and business conditions, companies have questions about taxation, labor law and infrastructure elsewhere.

Berlin, which has focused on wooing startups, recently redoubled its efforts to attract companies from London. Right after the Brexit vote, the city’s economics ministry began lobbying hundreds of companies by email, and this month set up a contact office in London.

Three months after the vote, six​ companies have decided to move operations to Berlin, ​besides​ WB21, said Stefan Franzke, head of Berlin Partner, the agency that runs the London office. Among them are real-estate investment platform BrickVest Ltd, web-design company MBJ London Ltd., and finance firm Swissbank Ltd., he said.

The agency is in talks with about 40 other companies about possible relocation, he said.

WB21 expects to get a German banking license in the coming months, allowing it to expand its product portfolio and offer loans, savings accounts and investment products to clients internationally.

“Instead of going through the licensing process and building a bank in the U.K., and then in three or four years perhaps not knowing if we can use it Europe-wide, we decided to come to Berlin,” said Mr. Gastauer. He said Berlin was more attractive than some other places in Europe because Germany’s status as a founding member of the EU made it unlikely to abandon the bloc, he said.

The company called Berlin “one the fintech-friendliest cities in Europe” and said the availability of qualified personnel also made it attractive.

WB21, which stands for ’web bank 21st century,’ plans to invest €50 million in the German capital.

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