Sydney ranks 27 places higher than Melbourne as a regional financial hub

Sydney ranks 27 places higher than Melbourne as a regional financial hub
Sydney ranks 27 places higher than Melbourne as a regional financial hub

Rivalries between Sydney and Melbourne will be renewed following a global survey that rates the NSW capital’s CBD as a far more attractive office location for the world’s biggest blue-chip companies.

Sydney placed equal 16th across all sectors, with 136 (49%) of the 280 major international companies occupying office space in the city, according to CB Richard Ellis’s Business Footprints survey

Melbourne ranked a distant 43, as just 87 companies have office space in the Victorian capital. Melbourne ranked just ahead of Auckland, which has 85 companies.

Brisbane ranked 9oth (with 48 companies) and Wellington 119th ( with 31 companies).

 

Global Office Locations 2011: Full City Ranking 

Rank  

City

No. of companies

% of companies present in city

1 

Hong Kong  

191 

68.2% 

2 

Singapore 

189 

67.5% 

3 

Tokyo  

179 

63.9% 

4 

London 

177 

63.2% 

5 

Shanghai

172

61.4%

16=

Sydney

136

48.6%

43

Melbourne

87

31.1%

47=

Auckland

85

30.4%

90=

Brisbane

48

17.1%

119=

Wellington

31

11.1%

 

Sydney also ranked higher as global financial and banking hub, with two-thirds of the world’s biggest banks and financial services companies occupying office space in the city,

Sydney ranks as equal ninth with Milan on the list of global banking and financial services hubs, hosting 32 international companies out of the 48 included in the CBRE survey.

Melbourne does not host enough companies to make it into the elite Top 10 list (CBRE does not provide figures for Melbourne), with top billing shared by traditional financial services powerhouses London and New York (92% of firms) with Hong Kong (88%) a close third.

 


However, the results might not tell the full story, since a multi-national only has to occupy a physical office in a city to be counted towards its ranking.

No additional weighting is given to the size of that presence in the city or whether it is the company’s local headquarters.

A closer look at the two cities by Property Observer suggests Melbourne may punch above its ranking.

Melbourne is the Australian headquarters of global giants Goldman Sachs, GE Consumer Finance, AXA Asia Pacific, Legg Mason, Standard & Poor’s, The Bank of New York Mellon, Mercer, Morgan Stanley, Vanguard, Computershare and Franklin Templeton.

It is also the home base of two of the big four banks, NAB and ANZ.

The other two major banks, CBA and Westpac, are headquartered in Sydney, as is HSBC, Munich Re, Credit Suisse, Royal Bank of Scotland, PricewaterhouseCoopers, Ernst & Young, Deloitte, Citi, China Construction Bank, The People’s Bank of China and QBE Insurance.

The global locations list (across all sectors) is headed by the Asian powerhouses of Asian, Singapore and Tokyo, which are home to about two-thirds of the world’s biggest global businesses.

London is the only city outside of Asia inside the top five. 

On a country basis, Australia placed equal ninth with Hong Kong in the country rankings, with 68.2% or 191 companies maintaining an office presence in the country.

New Zealand also made the top 50, ranking a respectable 46th place, with 34.6% or 97 multi-national companies present in the market. 

The US is home to the greatest number of the world’s biggest global companies, with 90% of the 280 companies having a presence in the company. A third of the businesses included in the survey are domiciled in the US.

The report highlights a trend among the world's largest companies to locate their offices in booming Asian economies, reflecting a shift in global economic power, with China ranked fourth (81%), Japan sixth (69%), Hong Kong ninth (68%) and Singapore 12th (68%).It also found that companies headquartered in Asia Pacific show significantly less propensity for overseas expansion than those headquartered elsewhere.

Nearly 40% of companies headquartered in Asia Pacific were present in fewer than 10 countries, compared with fewer than 20% of those headquartered in Europe, the Middle East and Africa or the Americas. 

At present, Asia Pacific-domiciled companies also typically confine their choice of locations in overseas markets to fewer cities than companies from other regions.

Pharmaceutical and healthcare firms typically have the widest global office distribution at country level while, at the other extreme, automobile and parts companies have a presence in the fewest countries. 

Sydney’s strong global showing comes as leasing activity picks up on the back of a growth in corporate jobs.

In April, 20 new leasing deals were signed in the Sydney CBD, CBRE reported.

CBRE regional director of office services James Patterson reported in March that there were signs of strong effective rent growth in the past six months in the Sydney and Melbourne CBDs.

Patterson expects strong rental growth in the Sydney CBD in the short term before an increase in development activity, including Barangaroo, starts to restrict the scope for landlords to increase rents.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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