Businesses fleeing to Singapore from Hong Kong dealing with soaring inflation costs in city state

With inflation soaring to the highest level in 14 years, expenses including the hiring of talent, office space and utilities are rising at a faster pace in Singapore than in its financial rival, where price increases have been more modest.

Accelerating prices haven’t stopped the rate of new business formation in the Southeast Asian city state from reaching a 17-month high in August. In Hong Kong, the number of new local businesses has held roughly steady with 2021’s pace but is down from a peak in 2017.

Here’s the outlook facing companies considering a relocation:

Office rents

Hong Kong is the most expensive office market in the world, but unpredictable virus guidelines and political uncertainty has plagued its economy, forcing landlords to cut office rents in core business districts through June by 4 per cent from December. In contrast, the cost of rent in Singapore’s central business area accelerated for a third quarter, continuing its upwards momentum.