In search of the best financial locations in Asia, Colliers International conducted a comprehensive study of 16 cities in developed and emerging markets across Asia, examining nearly 60 criteria across a spectrum of socio-economic, property and human factors. Hong Kong comes #1 in Asia, with Fintech gathering pace, followed by Shanghai at #4, benefiting the most from China’s financial liberalisation, and Seoul at #5, showing higher than expected score.
Andrew Haskins, Colliers’ Asia Head of Research, commented: “Based on quantitative and qualitative analysis of socio-economic, property and human factors, Colliers believes the three top locations in Asia for financial occupiers are Hong Kong, Tokyo and Singapore. At #4, Shanghai is benefiting the most among Chinese cities from the country’s financial liberalisation, while Seoul at #5 is a wild card finance location with strong scores.”
Fiona Ngan, Colliers’ Hong Kong Head of Office Services, added: “The increasing importance of fintech and Hong Kong’s emergence as a fintech centre due to close proximity to China are key reasons for optimism about the city’s ability to remain a leading financial centre. We forecast that the total rent growth of prime grade office in Hong Kong over the period 2019-2022 will be only moderately higher than in 2018 alone, reflecting a slowdown in the office leasing market. This should come as a relief for occupiers which have been struggling with rising rents over the past couple of years.”
Top Locations for Finance Firms
Hong Kong (Score: 61%; Position: #1) scores highly on socio-economic factors, including employment criteria such as political stability, ease of doing business and regulatory governance, and wealth factors such as stock market value, city inward FDI and position in cross-border banking. Under property factors, high wages and rents push up employer costs, but total office stock is high and there is a wide gap in rents between the CBD and other areas. Hong Kong is #2 in Asia on human factors, due partly to a low tax rate and high quality of living.
Tokyo (Score: 60%; Position: #2) comes in second place since it scores highest overall on socio-economic factors, reflecting its huge size, high wealth and stability as a global financial hub. The city’s high socio-economic score is partly offset by its low property score -- reflecting high staff costs, rents and a conservative office facility offering. However, Tokyo scores well on human factors, due largely to its high quality of living, safety, climate and lack of pollution.
Singapore (Score: 55%; Position: #3) scores very highly on socio-economic factors, especially employment criteria, due to high political stability, the ease of doing business, high-quality infrastructure and strong regulatory governance. It lacks the banking scale of Tokyo or Hong Kong but is a key wealth management centre. Singapore only has a modest score on property factors, due largely to its limited stock of prime grade office space. However, Singapore comes top on human factors such as personal tax, safety, living quality, climate and pollution, and the high-tech city metric included in our scoring.
Shanghai (Score: 54%; Position: #4) is China’s financial capital. It scores well on measures of economic scale and wealth, with GDP/capita 139% of the national average and an equity market value of about USD4.2 trillion. Shanghai also scores highly on property factors, notably on quality of office stock, and on intra-city connectivity. It has two key financial zones (Lujiazui and the Bund) and is benefiting the most among Chinese cities from the country’s financial liberalisation.
Seoul (Score: 53.5%; Position: #5) scores favourably on measures of economic scale and wealth, as well as employment considerations such as political stability, ease of doing business and city infrastructure. While Seoul’s ranking on property factors is modest, it scores highly on human factors such as safety, environment and the high-tech city metric.
You may download the full report here.