It seems counter intuitive at first, but it's the same way in Canada and the US. Toronto, Montreal, Vancouver, San Francisco, New York, etc.; they're all the best places to grow companies. Rent is a fraction of what start-ups pay in salaries and the talent pools are often focused around those areas. You're right that you'll save money if you're bootstrapping or have a remote team, but if you're taking money and/or growing and hiring, higher rent is just the cost of being in a good location for everything else.