HK edges ahead of Singapore as business hub: StudyHong Kong has the edge over Singapore as a business hub, providing a richer financial industry and talent pool while Singapore takes the lead in terms of technology and ESG (environmental, social and governance) initiatives and green building, according to a study released by property consultancy CBRE on Tuesday.

The report found that Hong Kong had the overall advantage across seven broad categories, coming out on top in three: the scale of its financial industry, its availability of talent and its ample supply of office space. Singapore, meanwhile, took the honours in two areas: the scale of its technology industry and its efforts in ESG initiatives and green building.

As a business hub, the study pronounced Singapore’s economy more diversified than Hong Kong’s, as the service sector in Hong Kong, including financial, insurance and trading, accounts for more than 90 per cent of the city’s economic output.

In 2020, Singapore’s real gross domestic product (GDP) surpassed Hong Kong’s. Both cities are important in terms of connectivity, but with different regions; Hong Kong is a regional hub for China and North Asia while Singapore is more central to the fast-growing economies of Southeast Asia.

Hong Kong is likely to become the largest private wealth management centre and is tipped to overtake Switzerland in 2026, the report found. The city held the Wealth for Good summit in March as part of an effort to encourage more companies to locate their Asia-Pacific headquarters there.

Singapore outpaces Hong Kong in terms of research and development spending, investing almost 2% of its economic output, compared with 1% in Hong Kong, CBRE said. Both cities are competing for skilled workers and have implemented new visa programmes to attract talent.

In terms of office rents, the two cities are neck-and-neck. Singapore rents have risen by 43% over the past three years, while Hong Kong’s have registered the steepest decline in a decade in 2022. A surge in office-space supply in Hong Kong is likely to further weigh on rents, the study said.

Singapore boasts more science and technology workers, while Hong Kong possesses a deeper financial talent pool. Singapore attracted more talent last year, while Hong Kong experienced a net outflow.

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As of June, the number of multinational corporations maintaining regional headquarters in Hong Kong had fallen 5% compared with June 2019. However, an 18% increase in the number of mainland companies in the city in the same span offsets any decline.

In terms of commercial property investment, investors continue to be attracted to Singapore’s office properties due to their stable returns and solid price performance. Deeply discounted office assets in Hong Kong also offer favourable prospects for value-oriented investors, CBRE said.

Hong Kong offers a more diverse range of commercial areas than Singapore, but the latter plans to accelerate decentralisation from its central-business district by developing satellite business areas over the next 20 years. Despite the narrowing rental gap, Singapore remains a top destination for global tech companies planning to set up corporate Asia-Pacific headquarters, CBRE added.