Hong Kong tops list of Asian cities for financial firms to call home, but is losing investment attractiveness, according to surveys
- City tops Colliers ranking because of high market capitalisation, cross-border banking and large population of resident billionaires
- But is down by one place in survey released jointly by PwC and US think tank because of its low office market yields
Hong Kong is the best location in Asia for setting up a financial company, according to a research published on Thursday by global real estate services and management company Colliers International. Another survey, released the same day by accounting firm PwC and US-headquartered think tank Urban Land Institute (ULI), however, found the city’s investment attractiveness was on the decline.
In the ranking by Colliers, the special administrative region tops a list of cities in Asia for setting up finance companies because of its high market capitalisation, cross-border banking, inward flowing investment and large population of resident billionaires. Tokyo came a close second while Singapore was in third position.
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“The increasing importance of financial technology, and Hong Kong’s emergence as a fintech centre due to its proximity to China are key reasons for optimism about the city’s ability to remain a leading financial centre,” said Fiona Ngan, head of office services in Hong Kong at Colliers.
Colliers, however, did point out that Hong Kong scored poorly as far as employer costs were concerned, partly because of the world’s highest office rents in its central business district. For instance, BitMEX, a trading platform for bitcoin and other cryptocurrencies, last month rented the entire 45th floor of the Cheung Kong Center for HK$225 (US$28.7) per square foot per month, which makes it the most expensive office in Hong Kong.
But the company has forecast a slowdown in Hong Kong office rent increases starting in 2019, due to mounting tensions around the US-China trade war and a Hang Seng Index that is in bear territory.
“Our assumption of a softening in rents should come as relief to financial occupiers, who have been struggling with rising rents over the past few years,” said Andrew Haskins, executive director for research in Asia at Colliers.
He forecast a 3.8 per cent drop in office rents in Hong Kong’s Central and Admiralty districts in 2019 after a 7.9 per cent increase in 2018.