Stephen Brown, group general manager, Sino Land Co Ltd, says Hong Kong's rentals reflect how competitive the city is in global markets

Stephen Brown, group general manager, business development of Sino Land Company Limited, said Hong Kong's competitiveness will not be dented after rising 12 places to become the ninth most expensive city in the world in December.

Dismissing this as a "league table", he said: "Cost reflects competitiveness. It doesn't determine it. Nobody pays the rent unless you can earn it. Hong Kong is a strong market by nature of the marketplace. If you're in Bangladesh for example, you can't afford such prices."

He cited the example of Hong Kong's newest office building Two IFC, in the Central financial district. At around HK$78 (US$10) a square foot, occupancy is nearly full. "It is not expensive at all for a world class office building with excellent facilities. Hong Kong has gone beyond costs as there's lots of choice for both commercial and residential property. Office rents go up because of a strong economy and companies can make profits and believe me, the scale of business done in Hong Kong is extraordinary."

The success story of Hong Kong, he believes, is the range and choice of its offices, flexibility in location and good infrastructure. "You can find all sorts of offices ranging from Central to Kowloon Bay, Canton Road to Kwai Chung."

Sound fundamentals the key concern

Like other developers and property consultants, Mr Brown believes operating costs are not key concerns for business expansion or companies moving to Hong Kong. "Look at London, which is the most expensive city in the world for office rentals. Nobody cares because they need to be there.

"What is more important are sound fundamentals like an internationally acceptable legal system, political stability, an established open capital account and good infrastructure. Hong Kong has all these and it has depth, a critical mass of talented labour, an extensive network of people who can make things happen and its shipping and financial expertise are unbelievable," added Mr Brown.

At the end of the day, he said, Hong Kong needs to be a viable city to work and live in. He is insistent it will be, as Hong Kong complements China and there are strong synergies in the partnership.

"Facilitating the property market is the way to go. We want to see fair returns to the people who built the buildings and for people who work for the businesses. I am very optimistic for Hong Kong," Mr Brown said.     

According to government statistics, the number of regional headquarters and regional offices in Hong Kong reached an all-time high last year. There were 1,098 companies with regional headquarters and 2,511 companies with regional offices, increases of 14 per cent and 12 per cent respectively compared to 2003.

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