The United Kingdom was easily Europe's top destination for business investment, landing 647 new and expanded facilities last year (see chart). Following were France (271 facilities), Germany (196), Belgium (132) and Poland (117).

With Poland and Hungary taking the No. 5 and No. 7 positions overall in the 1998 facilities race, it's clear that Eastern Europe has become a major player in many companies' European real estate strategies. In fact, Eastern Europe, together with some of the former Soviet republics, attracted more than half of the year's biggest labor-intensive facilities (see chart).

"We see a very strong continuing performance in Eastern Europe, particularly for new investments," Bright says. "Eastern Europe is attractive as a market in its own right, as well as being a supply base back into Western Europe. Hungary, Poland and the Czech Republic captured about a third of all European auto investments last year, which is a heck of a performance. Some people thought those countries were running out of steam, but that's not happening."

Spain competed very well, attracting nearly 40 percent of all investments into Southern Europe. Chemicals, automotive and electronics firms were particularly active in Spain. Meanwhile, the combination of a skilled labor force and attractive quality of life in the South of France proved a strong lure for software and R&D facilities.

Other major findings include:
• In analyzing the '98 European location picture, it's important to draw a distinction between facility investments that originate in Europe and those that come from North America, Asia and other global regions. While the United Kingdom is the No. 1 destination for facility investments in either case, it's tapped much more frequently by non-European firms (see sidebar article).

• German industrial giant Siemens AG announced seven new or expanded European facilities last year, more than any other company. Other highly active firms include CNBC Europe, DHL Worldwide Express, Electronic Data Systems and FaciliCom International (six facilities each).

• Greater London was Europe's top region for new and expanded facilities, landing 146 investments (see chart). Rounding out the top five were Ile-de-France (e.g., the Paris region), with 65 facilities, followed by Dublin, Ireland (50), Pest, Hungary (47), and West Midlands, United Kingdom (46).

• In terms of new manufacturing plants, St. Petersburg, Russia, came out on top among European regions with 12 new factories. Other key competitors include Pest, Hungary, and Moscow (each with 11 plants) and Heves, Hungary, and South Yorkshire, United Kingdom (eight new factories each).

• London took top honors among European cities, attracting 144 new and expanded facilities -- many of them sales and marketing offices. Next were Paris (49 facilities), Dublin, Ireland (43), Moscow (40) and Budapest, Hungary (38).

• Ireland outdistanced all its competitors in the chase for new call centers, attracting 17 such facilities last year. Dublin, Cork and Galway were the top Irish cities in luring call centers.

• Cities like Berlin and Copenhagen, Denmark, are stepping up as serious contenders in the hunt for headquarters facilities, joining longtime leaders London, Brussels, Belgium and others.

• U.S. firms remained the No. 1 source of European facility investments. Traditional Asian investor nations, such as Taiwan and South Korea, were joined in 1998 by an increasingly broad group of players, including Australia, India and Malaysia.

Looking ahead to how Europe's 1999 location map might turn out, Bright suggests currency issues could play a significant role. Those include the effective devaluation of the previously strong German deutschemark (a result of most major European countries' adoption of a single currency, the euro) and Britain's non-participation in European monetary union. But in the meantime, here's a more detailed look at 1998's winners in the European facility-location competition.