Deutsche Boerse relocates to Frankfurt suburb (News Feature)

Nov 1, 2010, 3:06 GMT

Frankfurt - The company which operates the Frankfurt Stock Exchange, Deutsche Boerse, is to this week inaugurate an office building in a Frankfurt suburb where the 2,000 staff have already settled in.

The relocation outside the city limits has triggered recriminations in Frankfurt, Germany's financial capital.

Deutsche Boerse is itself one of Germany's top 30 listed companies thanks to the fees it charges on massive volumes of transactions.

The company announced three years ago that it was moving to suburban Eschborn, a community which charges lower business taxes than the city of Frankfurt. That will reportedly save the company 60 million euros annually.

Running an exchange is a lucrative business and cross-border mergers keep making the big players bigger. This week, the Singapore Exchange made an 8.4-billion-Australian-dollar (8 billion-US-dollar) takeover bid for the Australian Securities Exchange.

Deutsche Boerse has coolly said it believes the tax it saves will be better invested in worldwide competition to attract traders.

Chief executive Reto Francioni has denied the shift to the suburbs will undermine Frankfurt as a financial centre. Boerse will still be on the register of companies of Frankfurt City and will still run a traditional trading floor in the venerable 'Old Bourse' building.

That open outcry floor is shown daily on business-television broadcasts, but visitors are often surprised to discover that the Frankfurt Bourse shown on street maps is not the place where billions of euros change hands.

The bulk of the trading of shares, derivatives and other investments is done through the company's electronic trading system, which is now tended from Eschborn. The company had revenues of 2.1 billion euros (2.9 billion dollars) last year.

In Frankfurt, some public officials are grumpy about the move, saying the city will be left with no taxes from Deutsche Boerse, and maybe should have negotiated a pragmatic discount.

Boerse, which is 425 years old this year, is renting its new, 53,000-square-metre corporate headquarters in Eschborn. The 21-storey, glass-and-steel building 7 kilometres from the city centre has been dubbed The Cube. It will be inaugurated on Thursday.

The Frankfurt street where Boerse moved into a modern rented office complex back in 2000 was given the name Neue Boersen Strasse, or New Bourse Street. That used to be a handy reminder of the correct location of the 'new' Deutsche Boerse offices.

The street name may remain, but visitors and taxi drivers now have to get used to the idea that this 'new' now means 'previous.'

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