Hong Kong, Singapore and Tokyo are choice spots for legal services firms in Asia.
Singapore has emerged as one of the top destinations for legal services firms, owing in part to its strong rule of law, as well as excellent human factors. The city state was ranked second – after Hong Kong and ahead of Tokyo – in Colliers International’s Top Locations in Asia: Law study, which identifies the best locations in Asia for the legal sector occupiers.
This is the third instalment of Colliers Research’s Top Locations series which also covered the Technology and Finance sectors.
The latest law sector study which placed Singapore among the top destinations for legal services firms, examined around 50 criteria for 10 cities in developed and emerging markets under three headings: socio-economic factors; property factors; and human factors.
Colliers’ analysis suggests that law sector occupiers pay particular attention to the following considerations when making decisions about operating in a new location in Asia: economic scale and growth potential of the city, proximity to clients, availability of talent, level of privacy and security, quality of office stock, and city safety.
Singapore in focus
Singapore scored 66.4% in Colliers’ ranking and was rated second overall to emerge among the top destinations for legal services firms. The country is becoming a pivotal legal centre in Asia. The strong rule of law and high quality of legal services in Singapore provide additional impetus to the country’s economic growth, and enhance the confidence of foreign enterprises about investment in Singapore.
Socio-economic factors
Under socio-economic factors, Singapore does not score highly on measures of growth potential or economic output since it is a small country with a population of just 5.6 million. However, it ranks highest in Asia on employment criteria and availability of talent.
The country’s strength in employment criteria reflects high scores on political stability, ease of doing business, corporate tax rate, city infrastructure, and English language capability. The excellence of the country’s educational and research facilities is indicated by the leading position that its flagship academic institutions enjoy in rankings of Asian universities – with particular strength in Law.
Singapore’s scores on the sub-category of law-related factors are not as high as those of certain other major legal centres. Like Hong Kong, Singapore’s legal system is based on common law.
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However, Colliers’ interviews with legal services firms suggest that many participants regard the legal services market in Hong Kong as more flexible and more open than the market in Singapore.
Colliers noted that the growth in exports of legal services indicates the scope for Singapore lawyers and law practices to venture out of Singapore to meet and capture a greater share of international demand for legal services. The Singapore government has promoted the local legal profession and motivated its legal services firms to expand into overseas jurisdictions such as Myanmar.
In addition, Singapore has built a well-respected dispute resolution support system featuring the Singapore International Arbitration Centre (SIAC), which is now one of the most prominent in the world.
Property factors
Colliers said that Singapore does not score highly on property factors. On the positive side, average net effective rent for prime grade office space of USD55 per sq metre per month is only about one-half of the citywide average for Hong Kong. Based on Colliers’ estimate, typical real estate costs for law firms in Singapore are 8-15% of monthly outgoings, versus 12-20% for Hong Kong. On the negative side, Singapore’s total prime grade office stock of 24.9 million sq ft (2.3 million sq metres) is only about one-third of the level of Hong Kong and 13% of the level of Tokyo.
Human factors
As in Technology and as in Finance, Singapore ranks first in Asia on human factors. In particular, scores are high for personal tax rate, low air pollution, and the high-tech city index included in Colliers’ list of criteria. Furthermore, the country is ranked first for city safety and quality of living. These factors provide strong attractions for international law firms to locate operations in Singapore.
Commenting on the Colliers’ report, Paul Ho, chief mortgage consultant at iCompareLoan said, “with almost half of the Global 100 law firms having a presence in Singapore, established legal services firms will be among the top occupiers of premium office space here.”
“But to better understand the complexities of the office space leasing process and the choice of space available for their expansion, they should work with established and trusted sources,” he added.
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