In the heart of the Frankfurt banking district of Westend, Luise Hoepfner serves a steady stream of office workers her lunchtime menu of organic salads, soups and spelt-flour savoury tarts. The 28-year-old worked in event management for several years before opening her restaurant Vif (old German for “chipper” or “lively”) on Mendelssohnstrasse in September.
“I am convinced this is the right time to invest in Frankfurt,” Hoepfner says. “It’s cheaper than London – just – and it’s growing all the time. When Brexit happens, whatever form that takes, it will only increase the demand.”
With a shabby-chic interior that would not look out of place in Greenwich Village or Brick Lane, Vif offers quite a contrast to the stereotypical view of Germany’s banking capital (and home of the European Central Bank) as a dull, boring, grey-suited metropolis.
The age-old German afternoon tradition of kaffee und kuchen (coffee and cake) attracts customers in the afternoon, and a fridge is full of rieslings, craft beers and ciders for after-work gatherings. “I heard British bankers like their craft beers,” Hoepfner says.
This city of more than 730,000 inhabitants is quietly gearing itself up for Brexit – even if, like everyone else, it doesn’t yet know what that might entail.
While publicly at least, the Germans have been reluctant to appear to be “cashing in” on what London stands to lose if it can no longer serve as the financial hub for global firms looking to do business in the EU, there are growing indications that Frankfurt cannot fail to gain.
A recent research paper by Prof Dirk Schiereck of the Technical University in Darmstadt concluded that the merger between the London Stock Exchange and Deutsche Börse (which commissioned the paper) increases the probability of Frankfurt securing a large chunk of post-Brexit spoils. The report predicts the German city will become “the clear European centre for financial market regulation and … the European centre for supranational risk management”.
Frankfurt’s politicians and marketing board have been busy with a charm offensive, sending roadshows to London as well as setting up a walk-in information centre in the city for would-be movers.
Meanwhile, international banks and businesses currently based in London have been sending scouts to Frankfurt in large numbers to gather information on everything from the availability of villas and international schools, to the labour laws and how easy it is to find English-speaking workers.
A recent survey of 360 London bankers by the Boston Consulting Group put Frankfurt in a prime position, ahead of rivals such as Paris, Amsterdam, Dublin or Luxembourg. Its advantages were its central location, sophisticated infrastructure and property prices considerably lower than in London or Paris.
And while banks and businesses have kept their cards close to their chests regarding any planned moves, there is much anecdotal evidence that some will take place before, not after, Britain’s exit.
The decision announced last month by Swiss bank UBS to set up a new entity called UBS Europe SE in Frankfurt is being widely interpreted as the first major Brexit-influenced move. UBS also plans for its continental European investment banking and wealth management operations to set up shop in the German city, according to reports. The move could mean the bank shifting 1,500 people – or a third of its London staff – from the UK.
Sources within Citigroup have acknowledged the investment bank is contemplating moving some of its London-based traders to Frankfurt, though there has been no official confirmation. Executives from JP Morgan Chase and Morgan Stanley, meanwhile, have said they are sure to move staff from London in the case of the UK losing so-called “passporting rights”, but have refused to be drawn as to which city they favour.
Frankfurt itself talks of between 8,000 and 20,000 jobs moving here from London, incrementally. Real estate agents are said to be feverishly fielding property enquiries from companies, with the main question being not so much an interest in prices – which are considerably lower than in London or Paris – but the availability of luxury housing.
“A CEO’s main priorities are to find out whether there are enough qualified personnel in their particular field, what is the regulation like here, how close is the airport,” says Michaela Kahle of FrankfurtRheinMain GmbH, the regional marketing agency. “They will make decisions on cost grounds. But they also want to know how many international schools we have, and what the shopping facilities are like.
“In many regards, Frankfurt cannot begin to compete with London – it’s considerably smaller and quieter. An investment banker with more money than he knows what to do with might rather choose Paris or Berlin,” says Kahle. “But for families with children there’s a lot to be said for the short distances; the fact that schools, houses and living facilities are nearby, and that you can cycle from one side of the city to the other in a short time. The atmosphere is arguably more relaxed, less hectic than in London.”
Florian, a 41-year-old German working in the financial sector for a major German company – who, because of the sensitivity of his role in conjunction with Brexit, did not wish his surname to be used – remembers being very unimpressed with the city on his first visit. “It was the mid 90s and I came to visit a university friend who was doing an internship with a bank. I thought it was so dull. To coin a German phrase, was as if they’d folded up the pavements.” But 20 years on, and now settled here with his psychologist wife and their two children, he can hardly imagine wanting to live anywhere else.
“It has changed immensely,” he says. “It’s a very lively, international city, and becoming more so all the time.” It does not boast the vibrancy of somewhere like Berlin, he admits, “but it’s a completely different type of city.”
From his own experience, “it’s a great place in which to combine city living and family life”. His family lives in a 1930s rented house with a small garden, three minutes’ walk from a metro station and a short commute to work in the centre of the banking district. The weekends often involve a hike in the nearby Taunus mountains. “It’s easy to manage the public transport in this city with prams and small children, unlike London, where there are a lot of barriers,” he says.
As to fears that an influx of London-based bankers to Frankfurt – estimates range between 8,000 and 10,000 – might have an adverse effect on the city, Florian says: “Maybe it’ll be the case that these play hard, work hard people will also start to enjoy the slower pace and the proximity of nature. Rather than them changing Frankfurt, maybe Frankfurt will change them.”
One banker commenting anonymously told the Guardian that while the city might lack the “frisson” of London, Frankfurt had, as he saw it, much to offer. He called it the “cocaine capital of Germany, with an important electronic music scene”.
But according to David Hughes, an HR manager in an international law firm who moved to the city six years ago, “there’s probably a lot less cocaine in Frankfurt than in London. If I were working in London it would likely take wild horses to get me to Frankfurt.” He was keen to add his remark had nothing to do with the availability of cocaine.
The 33-year-old Dublin native lives in a 807 sq ft, maisonette flat (monthly rent €1,100 (£940) a month with his boyfriend, a Spanish architect. “In the mornings I just hop on my bike and roll down the hill for 10 minutes to get to work. I don’t waste six hours of my week in a dirty tube.”
Neither did he believe that an invasion or a trickle of bankers arriving from London would manage to change the city. “It would have to be a really massive influx to tip the balance in the social ecosystem. You pass by so many languages when you walk down the street already,” he says.
The downsides of life he speaks of could actually apply to all of Germany. “Poor customer service, Sunday closing, and the lack of rugby,” he says. “After six years here they remain the most frustrating factors”.
Phoebe Escott-Kenny, an Australian who moved to Frankfurt in 2011, offers corporate training to German and Russian business people as well as keeping up a travel blog. “People are constantly asking me: ‘you left Australia for Frankfurt?’” she says. “The trouble with Frankfurt is that it’s not obvious if you come here with no guidance as to what it’s got going for it, it reveals itself slowly,” she says. “Frankfurt is not under pressure to retain its cool image like Berlin is.”
She and her boyfriend, Dominik Felsmann, a management consultant from Stuttgart, live in Bahhofsviertel, the neighbourhood around the railway station and in the centre of the city’s red light district, which they refer to as “mini Berlin”.
“Every man and his dog wants to live here,” says the 28-year-old Escott-Kenny. “It’s the most buzzing part of town. Every week a new bar or speakeasy opens up, a restaurant or a coffee shop. Six years ago you couldn’t get a decent cup of coffee, now it’s burgeoning with good cafes. The only annoyances are the dog turds and drug users’ needles outside the front door.”
Dominik, her boyfriend, says he travels a lot, “so I can compare Frankfurt to other places. And I can say it’s a typical anglo-Saxon/American city in many regards, more so than Munich or Berlin. You can get your €100 steak and live in a castle or live closer to gritty real life – it depends what you want.”
guardian.co.uk © Guardian News & Media Limited 2010