Hong Kong is continuing to show its strength as a business hub when compared to Singapore, according to a study by property consultancy CBRE. Hong Kong offers substantial financial prowess, an abundant talent pool and plenty of office space, marking it as providing an edge over Singapore. Singapore, on the other hand, has the advantage in terms of its prominent technology industry and ESG initiatives, as well as green building.
Hong Kong and Singapore remain two of the foremost business hubs in Asia-Pacific. Even though Singapore’s real GDP surpassed that of Hong Kong in 2020 due to the Covid-19 pandemic, Hong Kong still comes out on top in several categories, according to a property consultancy CBRE study released on Tuesday. The city scored highly in terms of its financial industry, talent pool and availability of office space.
Singapore, however, has its own advantages, such as its larger scale technology industry and its ESG initiatives. CBRE’s report praised Singapore’s more diversified economy, in comparison to Hong Kong, which relies heavily on the service sector.
The 2020 report found both cities play important roles in terms of connectivity, though it covers different regions. Hong Kong is a regional hub for China and North Asia while Singapore is more central to fast-growing Southeast Asian economies.
As well as their economic advantages, the study also pointed out their varying office rental markets. Hong Kong has seen a slight drop in the number of multinational corporations located in the city since 2019, though there is limited evidence of a “massive corporate migration”. Meanwhile, although Singapore’s office rents have risen 43% in the past three years, the report found it was a tie between the two cities.
Existing Condos (ECs) are a cheaper and more viable option for first-time homeowners compared to private condos, potentially costing up to 30% less HDB Executive Condominium when factoring in housing grants.
Singapore outshines Hong Kong in terms of R&D spending, however Hong Kong is “catching up” with Singapore in terms of technology capabilities. Singapore also attracted more talent last year, though the foreign worker numbers remain below their 2019 levels.
Hong Kong is likely to become the world’s largest private wealth management centre and overtake Switzerland in 2026. The Wealth for Good summit was held in March with an aim to attract 200 family offices to make Hong Kong their base by 2025. Hong Kong has also exempted family offices from profit taxes since December.
In terms of commercial property investment, Singapore is attractive due to its stable returns and solid price performance. Hong Kong office assets however, offer attractive prospects for value-oriented investors due to discounted sales resulting from its interest rate hikes or weakening capital values.
Overall, both cities have advantages that draw investors and multinationals, though the competition for talent shows no signs of stopping. As office supply rises in Hong Kong and satellite business areas are developed in Singapore, the commercial property markets of both cities are bound to be interesting to watch in the coming years.