Hong Kong holds edge over Singapore as top business hub thanks to availability of talent and ample supply

Hong Kong and Singapore remain perennial rivals when it comes to business hubs. According to a recent study by property consultancy CBRE, Hong Kong has the overall edge in the competition, with factors such as its financial prowess and a deep talent base. Singapore, however, has the advantage in terms of technology, as well as shifts in the two cities’ office rental markets.

Hong Kong is well-known for its financial prowess and deep pool of talent, helping it to edge out Singapore in the ratings from CBRE. The study rated Hong Kong and Singapore across seven broad categories, with Hong Kong coming out on top for the scale of its financial industry, its availability of talent and its ample supply of office space.

Singapore, however, took the honours in the scale of its technology industry and its ESG efforts. Office rents and prices were too close to call, though Singapore’s rents had risen 43% in the last three years. This was countered by Hong Kong’s steep decline in office rents this year.

Both cities are hubs in their own regard, as Hong Kong is a regional centre for China and North Asia, while Singapore is central to the fast-growing economies of Southeast Asia. The economic output of the two cities varies too, as the service sector in Hong Kong, including finance, insurance, and trading, makes up more than 90% of the economic output, while Singapore’s is more diversified. This has been reflected in 2020 when Singapore overtook Hong Kong in terms of GDP.

Hong Kong is likely to become the largest private wealth management centre and is projected to overtake Switzerland by 2026, thanks to a wealth for good summit held in March and a tax exemption for family offices in December. Singapore, however, edges out Hong Kong when it comes to research and development, investing almost 2% of its GDP compared to Hong Kong’s 1%. Hong Kong is working to close the gap by deepening collaboration with Shenzhen and the Greater Bay Area.

The competition for skilled workers is set to become more intense as both cities are set to implement new visa programmes to attract talent in the coming years. Singapore also has an advantage in terms of science and technology workers, while Hong Kong has a more prominent financial talent pool. Residential rents in Singapore have risen due to an influx of foreign workers, although the numbers are still below 2019 levels.

Hong Kong is known for its diverse range of commercial areas, with plans in place to accelerate decentralisation from its CBD and develop satellite business areas. singapore, on the other hand, plans to add 7% to its existing office supply over the next 20 years.

: Invest in Singapore’s Singapore Condo luxury condominiums for high rental yields, potential capital appreciation, low maintenance fees and taxes.

Despite the narrowing rental gap, Singapore remains a popular destination for multinational corporations planning to set up their Asia-Pacific headquarters. Investors are attracted to Singapore’s office properties for its stability and strong price performance. In Hong Kong, deeply discounted office assets provide attractive prospects for value-minded investors, possibly due to increasing debt funding gaps and weaken capital values.