Originally Posted by teddifax
Halifax area top of the cheap heap for head offices, consultant says
17 hours ago
By BRUCE ERSKINE Business Reporter
An American location consultant says Halifax-Dartmouth is the least expensive place in North America for a corporate office. (ERIC WYNNE / Staff)
Halifax-Dartmouth is the cheapest corporate headquarter location in North America, says the Boyd Company, Inc., an American location consultant.
“There are big, big savings to be had in Halifax,” company principal John Boyd said Tuesday in an interview.
The Princeton, N.J., firm recently completed a study comparing the costs of operating a corporate headquarters in 50 leading head-office real estate markets in Canada and the United States.
Operating costs were scaled to a hypothetical 100,000 square feet corporate head office employing 500 workers and included all major geographically variable cost factors critical to the site selection process.
Halifax-Dartmouth ranked as the lowest-cost site in Canada and the U.S., at $32.9 million a year.
That was less expensive than the lowest head-office cost site in the U.S., Indianapolis-Carmel-Fishers, Ind., which cost $35.7 million annually.
For comparison purposes, all costs were calculated in U.S. dollars at parity.
The Boyd study found New York City to be the most costly North American metropolis to operate a corporate headquarters, at $47.2 million per year, followed by San Jose-Sunnyvale-Santa Clara, Calif., at $46.5 million and San Francisco at $46.1 million.
The most expensive Canadian corporate headquarter locations were Toronto-Mississauga at $39.1 million, Vancouver-Burnaby at $38.9 million and Montreal-Laval at $36.9 million.
Halifax-Dartmouth annual earnings as a portion of labour costs were $47,275, lower than Indianapolis’s $48,487 and Winnipeg’s $48,390, and well below Toronto at $55,857, Vancouver at $55,421 and New York City, the ranking’s highest earning location at $59,930.
“Labour costs are very, very competitive in Halifax,” said Boyd, who noted that labour costs “tend to dominate the (ranking) equation.”
Real estate costs in Halifax are also competitive, especially when compared with other Canadian headquarter sites such as Toronto and Vancouver, he said.
“The traditional savings have diminished in Western Canada” with that region’s enormous energy-sector success, he said.
Halifax-Dartmouth’s annual property and sales taxes costs were $1.496 million, more than twice the $633,5311 in Indianapolis, which Boyd attributed to the costs associated with paying for Canada’s public health-care system.
“There’s no free lunch,” he said.
More and more companies are looking at affordable, central locations such as Indiana, but Halifax’s position as a regional business centre that attracts top graduates, its proximity to Europe and its positive cost ranking bode well for its ability to attract corporate headquarters, he said.
“Indiana is on the radar and so will Halifax,” Boyd said, suggesting that companies headquartered in Toronto and Vancouver could relocate to Halifax because of the cost savings.
“Companies want to rebrand as fiscally responsible.”
Boyd said annual headquarter cost-savings of seven to eight million translate into hundreds of millions when amortized over 25 years.
Founded in 1975, his company provides comparative business cost analysis and strategic site selection to Canadian clients that include TD Canada Trust, Sun Life Financial, PepsiCo Canada and Onex.
The company will present its findings next Tuesday at the Halifax Marriott Harbourfront Hotel.
(berskine@herald.ca)
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