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The technology, media, and telecom (TMT) sector emerged the second biggest office occupiers in Singapore since 2015, just behind financial institutions, according to the latest report from CBRE.
From last year to Q3 2016, the industry accounted for around 658,000 sq ft of office space either in the form of newly rented premises or relocations primarily in the central business district (CBD).
Although this excludes business park space, the consultancy noted that TMT companies contribute to significant leasing activity in such properties.
“The sector continues to be a key contributor to office leasing demand in Singapore,” said Moray Armstrong, CBRE’s Managing Director for Advisory & Transactions in the city-state.
He noted that TMT firms tend to prefer office space in the downtown core and CBD fringe areas as they have been able to take advantage of attractive leasing deals on offer, given the current market situation.
In fact, there has been a marked increase in leasing activity driven by flight-to-quality and tenants seeking attractive terms. These opportunistic deals were mainly concentrated in new developments, such as Guoco Tower in Tanjong Pagar, where tech firms like Amadeus, Agoda, Palo Alto, Unity Technologies and OpenLink have all pre-committed space. Consequently, these firms now make up a large percentage of the building’s total occupancy.
“By locating offices in the CBD, small to medium-sized tech, media and telco players, in particular, gain competitive edge in attracting and retaining talent,” Moray explained.
“These trends are also evidenced in the growing fintech sector, where we are seeing healthy leasing demand as Singapore positions itself as the centre for this activity,” he added.
Meanwhile, CBRE’s Asia Pacific TMT Sector Trends 2016 report revealed that the healthy market for these firms’ services, alongside the strong growth of internet users and mobile devices, continue to fuel the industry’s demand for office space.
“For many tech, media and telecoms firms operating in Asia-Pacific, favourable demographic factors are driving both robust business performance and serving as a catalyst for aggressive expansion strategies,” said Manish Kashyap, Regional Managing Director, Head of Advisory & Transaction Services, CBRE Asia Pacific.
“This backdrop is translating into strong office leasing demand across major gateway cities regionally, such as Beijing, Singapore and Sydney, with increased attention focused on locations and workspaces that foster the collaboration necessary for the tech, media and telco sector.”
Furthermore, the report showed that newer international TMT firms remain active in acquiring office space, but domestic technology companies are becoming prominent occupiers in the Asia Pacific region as measured by transaction value and volume.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg.
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