Singapore is the sixth most expensive city for companies to locate employees, according to a new survey.
The survey compiled by property firm Savills measures the total yearly costs per employee of renting living and working space in US dollars in 12 cities, as well as additional costs such as local taxes. The ranking in the form of an index was launched in 2008, with Singapore also coming in sixth that year.
London topped this year’s list, overtaking Hong Kong, which had previously led the pack for an unbroken five-year period.
Changes in total living and working costs reflect not only the strength of a city’s residential and office markets and occupier taxes and costs, but also the impact of fluctuating exchange rates, Savills said.
The sterling’s appreciation against the greenback up until June, coupled with significant increases in office rents, pushed up London’s total costs in US dollar terms. Real estate costs in the British capital grew in US dollar terms by an annualised rate of 10.6 per cent in the first six months of the year.
Despite climbing from fifth to first place since 2008, London is still off the record set by Hong Kong in 2011 at US$128,000 per employee per year. Hong Kong’s position relative to the emerging markets of mainland China means that it is likely to remain an attractive location for companies, despite property-market cooling measures.
It remains by far the most expensive city in which to buy a home, with prices 40 per cent higher than London’s, said Savills.
At the other end of the table, costs in comparatively affordable Rio de Janeiro have risen 85 per cent since 2008, while they are up 58 per cent in Sydney.
Mumbai retains its position as the cheapest city, at about US$30,000 per person per year, down 21 per cent in US dollar terms since 2008.
“This year has seen much more modest real estate price growth in nearly all our world cities and some have shown small falls,” said Ms Yolande Barnes, director of Savills World Research.
“We expect this subdued trend to continue as investor interest and market activity shift to second-tier cities.
“This lower level of price growth means that currency fluctuations have produced some of the biggest changes in our rankings, which are expressed in dollar terms.”