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SG vs HK: Where should MNCs establish their APAC headquarters?

CBRE compared the two markets across seven factors, including influence in APAC.

Hong Kong SAR and Singapore are both attractive locations for multinational corporations seeking to establish a headquarters in the Asia-Pacific (APAC) region, but when looking at several factors, one market is better than the other.

According to a report by CBRE, Singapore wins over Hong Kong in terms of the scale of the technology industry.

“Singapore invests more in research and development (R&F) and leads in high-tech manufacturing,” CBRE said.

The real estate expert, however, underscored that Hong Kong is catching up by deepening collaboration with Shenzhen and the Greater Bay Area.

In terms of ESG and green building initiatives, Singapore also has the upper hand.

“Singapore's green building adoption rate is much higher than that in Hong Kong SAR,” CBRE said.

For Hong Kong to reduce its carbon intensity, CBRE said the city can leverage the Mainland's new energy industry growth.

Meanwhile, office availability and the scale of the financial industry are areas where Hong Kong wins over Singapore.

“Hong Kong SAR is the leader in terms of fundraising. RMB deposits and wealth management,” CBRE said.

The expert, however, noted that Singapore’s forex business is bigger than Hong Kong, but both markets are seeing growth in private wealth management.

On office vacancy, CBRE said Hong Kong SAR “currently stands at the highest on record with substantial new supply in the pipeline over the next four years.”

Total office stock in Singapore is only 73% of that in Hong Kong SAR, giving corporate occupiers more options and flexibility when choosing an office location in the latter market.

Between 2023- 2026, Hong Kong SAR will see the addition of 10% of its existing stock, while Singapore will welcome the completion of 7% of its existing office supply.

On areas of talent availability and attraction, office rents and prices, and influence on Asia Pacific, CBRE said both markers are tied.

“Hong Kong SAR and Singapore play complementary roles. Hong Kong SAR is more convenient for running China and North Asia operations, whilst Singapore is more suited to Southeast Asia and India,” CBRE said.

CBRE underscored that the pricing and rental gap between the two cities’ CBD offices is also narrowing.

Whilst Singapore’s CBD is cheaper, Hong Kong offers more cost-effective decentralised nodes, the expert added.

READ MORE: Global minimum tax and its potential impact on business planning for MNCs in Singapore

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