HONG Kong is on the way to becoming the most expensive place in the world to rent an office, according to a new world survey by international property consultancy Richard Ellis.
This may sound rather grand, but the implications of having such a tag could be ultimately damaging to Hong Kong's economy.
Prime retail rents are already a staggering 130 per cent higher than their nearest rivals in the world, Tokyo and New York, and luxury residential rents are also on a dangerous upward spiral.
As a result, shop prices are being edged upwards, as are companies' rental allowances to expatriate staff and wages to cover Hong Kong's escalating cost of living.
It is amazing that Hong Kong has been able to keep its overall inflation rate below 10 per cent when property rents and capital values are leaping 10 to 60 per cent a year.
But just how long will it be before multinationals looking to set up regional headquarters in Asia stop picking Hong Kong? And could there be another exodus by international companies already based in the territory to cheaper locations? Local property consultancies have been reporting an increasing number of companies asking them to do comparative costing for Singapore.