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HONGKONG, MACAU, SINGAPORE

Jones Lang LaSalle Webinar Poll: Singapore anticipated to edge ahead of Hong Kong as leading financial center in Asia over next five years

Access to talent the key driver of location decisions, according to respondents


Singapore is the front-runner to be Asia’s financial center by 2016, according to a recent poll of real estate industry professionals conducted by Jones Lang LaSalle.

Participants from Asia, Australia, Europe and the US were surveyed during Jones Lang LaSalle’s latest Timing is Everything webinar, the topic of which was the Hong Kong real estate market versus the Singapore real estate market.

When asked which city has the best opportunity to be the financial center of Asia in the next five years the result was close, with 55 percent voting for Singapore and 48 percent for Hong Kong.

Jeremy Sheldon, Managing Director of Markets for Jones Lang LaSalle in Asia Pacific said, “Singapore and Hong Kong are Asia’s two premier financial hubs and while they are often thought of as competing centres, they are increasingly seen as complementary because companies have compelling reasons for locating in one city or the other.”

Respondents indicated that access to talent is the most important factor affecting companies’ decisions to locate or expand their businesses in these markets, with 73 percent of poll respondents indicating that this is a major driver, followed by office at 61 percent.

“The reality is that both of these markets are attractive location decisions for different reasons. For example, geographically, Hong Kong remains the gateway to China while Singapore provides access to significant growth in South East Asia and particularly Indonesia, which is currently experiencing strong economic growth,” said Mr Sheldon.

“One of the big differences between the two territories is the planning regime. Singapore has reaped the benefits of a well developed master plan that ensures the right space is available in the right locations. This includes space with large floor-plates in the CBD as well as suburban locations that are connected to the CBD to ensure location choice and price differential.”

“Hong Kong’s master plan is evolving and the ability to provide the CBD space with large floor-plates that companies demand, combined with decentralized space, will be a key to the city’s development going forward,” he said.

The capital markets are also leaning in favour of Singapore with 30 percent expecting property market returns to be higher and 38 percent expecting returns to be lower over the next 12 months compared to the previous year. In Hong Kong, 24 percent expect to see an increase and 54 percent expect lower returns.

These results are in line with the Jones Lang LaSalle third quarter 2011 property clock, which shows capital value growth reaching its peak in Hong Kong, while growth is slowing in Singapore.

Dr Megan Walters, head of Asia Pacific Capital Markets Research at Jones Lang LaSalle, said that what happens in 2012 in the Hong Kong and Singapore real estate investment markets will be dictated by several external factors.

“Uncertainty in the global economy, particularly in the Euro Zone, has the potential to feed through to all asset classes. However real estate continues to be attractive as a diversification strategy for investors. Low interest rates in the US combined with on-going inflation in domestic Asian markets will mean that investors will continue to invest in real estate in Asia Pacific,” said Dr Walters.

“In addition, if government engineered cooling is reversed to maintain domestic demand in Asia Pacific countries, local real estate investment markets will also benefit.”

 “A key difference for investors considering Hong Kong and Singapore is the currency position; whilst the Singapore dollar has appreciated against the US dollar, Sterling and other major currencies, the Hong Kong dollar is more directly pegged against the US dollar,” she said.
 
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Notes to Editors
1. Jones Lang LaSalle’s Timing is Everything webinar series explores the latest economic and real estate market trends in the Asia Pacific region. For more information or to view the webinar recording, visit http://www.ap.joneslanglasalle.com/asiapacific/EN-GB/Pages/TimingIsEverythingWebinar.aspx

2. A total of 44 participants on the webinar responded to the poll questions.