Declining property prices have made Hong Kong more competitive than its key regional rivals in attracting multinational companies, according to property consultant Knight Frank. Chief executive Gareth Williams said yesterday that in the past, cost-conscious multinational companies had opted for Singapore and Shanghai rather than Hong Kong. 'But our low rents make us more competitive when compared with Shanghai and Singapore,' Mr Williams said. 'Office rentals in Shanghai cost about $20 per square foot, and we can get the same thing in Hong Kong easily. It is the same for the residential sector. 'Hong Kong was regarded as expensive in the past. But with office rentals declining, we need to get the message over to multinational companies that Hong Kong is not as expensive.' He said Hong Kong had other advantages, when one took into account its cultural and physical infrastructure and factors such as access to international schools. Mr Williams said he expected office property prices to drop 17 per cent this year. Prices for luxury flats would decline 5 per cent and mass market residential prices would remain steady. Colliers International research manager Simon Lo Wing-fai said rentals of Hong Kong offices had fallen 15 per cent last year. 'Together with over 10 per cent depreciation in the US dollar, it will make Hong Kong more competitive when compared with other non-US dollar based cities,' Mr Lo said. He said office rentals in Shanghai were cheaper than those in Hong Kong but the gap was narrowing. At present, Hong Kong was still at a 30 per cent premium when compared with Shanghai in terms of rental prices, he said. He expected office rentals in Hong Kong to bottom out in one to two years. David O'Rear, the chief economist at the Hong Kong General Chamber of Commerce, said the territory was the best choice for foreign investment and for business involved in services, trade, legal practice and finance. 'If companies want to do business across Asia, they cannot do it from Shanghai. It lacks the legal system and financial standards,' Mr O'Rear said.