Warsaw can expect the biggest influx of international companies over the next five years.

The greatest impact on business over the next ten years is likely to be the opportunities offered by the growing markets of China and India.

London and Paris are by a long margin Europe's two top cities to locate a business, with the Spanish cities of Barcelona and Madrid rising up the ranking to challenge the likes of Amsterdam and Brussels, and also Frankfurt in third place. Dublin has a twelfth place ranking.

In this year's edition of European Cities Monitor, an annual survey carried out by property consultant Cushman & Wakefield Healey & Baker (C&W/H&B), Barcelona has overtaken Amsterdam to break into the top five, while Madrid closes up to form a leading group of seven cities.

This is the first time that the top five of the ECM ranking has changed since C&W/H&B first carried out the survey in 1990. The survey is based on interviews with Senior Managers and Board Directors of 500 of Europe's top companies. It looks at issues regarded as important by companies when deciding where to locate, and then compares the performance of 30 of Europe's leading business cities on each issue.

Roger Cooke, C&W/H&B's Head of Spain, comments: "Barcelona and Madrid have both energetically carried out strategic improvements to their cities over the past ten years - from updating their transport infrastructure to the education of the local workforce. In turn, this has raised the profile of these two leading cities as business centres."

Barcelona is also the city perceived as doing the most in Europe to improve itself as a business location, followed by Prague and Madrid.

Elaine Rossall, Associate of C&W/H&B's Research team, says: "Prague, Madrid and Barcelona, together with Berlin, have risen faster up the ranking since ECM was first launched in 1990 than any of the other locations. This goes to support the view that the more a city is perceived to promote itself, the more it will be perceived as a good business location."

In a new question for this year's edition of ECM, two-thirds of European companies interviewed said that the holding of a major sporting or cultural event would not influence whether they located in that city in the future, but that the Olympic Summer Games was the event that would have the best impact on a city.

Elaine Rossall continues: "A high-profile event may not in itself lead international companies to locate in the host city, but it does raise the profile of the city."

Regarding London's hosting of the 2012 Olympic Summer Games, Elaine says: "If the appropriate strategic infrastructural changes are made, London will be able to build on its position not only as Europe's No 1 business location, but also as a global location for business."

The overall city ranking of ECM is compiled from individual city scorings on 12 different location-oriented factors. The interviewees were asked to rank the importance of each factor. They chose 'easy access to markets' as the most important factor. Elaine says: "Communication and transport factors continue to be very important, as well as the availability of qualified staff. Cost factors are ranked behind these, with quality of life issues rated as the least important."

Looking at the other sections of the survey:

Company expansion: Warsaw remains the city that can expect the biggest influx of international companies, with more than eight per cent of respondents saying they expect to locate in the Polish capital over the next five years. In second place comes Prague, followed by Moscow and Budapest in joint third.

Greatest impact on business: Twenty five per cent of interviewees say that the growth of India/China as markets for their company is the factor that will have the greatest impact on their business over the next ten years. 'Performance of Euro economies' comes second, followed by 'Competition from Asia' and the 'Performance of the US economy' in joint third.

Familiarity with other European cities: Out of an additional 23 cities, Valencia comes top followed by Bucharest, and then Birmingham.

How current business locations can be improved: The three top issues are transport links with other cities, traffic circulation and public transport.

Relocation/outsourcing: 23 per cent of companies interviewed have relocated or outsourced operations to another country in the past three years, with Central & Eastern Europe being the favoured destination. Seventeen per cent of companies are planning to relocate or outsource operations to another country over the next two years.

Download the report.