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The influx of technology tenants is changing the demand dynamics for office space across Asia Pacific, according to the latest study by Colliers International.
“Finance and insurance companies have traditionally been the major tenants of CBD offices in Asia, but that is now changing as an increasing number of tech firms – many of which are younger companies or startups – take up CBD space,” said Sam Harvey-Jones, Colliers’ Managing Director of Occupier Services for Asia.
To attract these companies, developers are building office blocks catering to their needs and the wants of their younger staff, who prefer working environments that are fun, creative and unstructured, he said.
In particular, the study revealed that tech firms in Singapore have different choices for office space location and the type of building they want to occupy.
“Differentiation is a big driver for tech firms in Singapore. To create a point of difference and establish their brands, second and third generation tech firms prefer to locate in core CBD locations,” said Anthea To, Senior Associate Director for Research and Advisory at Colliers International.
This allows for proximity to public transportation and other amenities such as retails shops and restaurants, a boon for wooing workers, she added.
However, she also noted that the more established first generation firms opt to reside in a more decentralised area as they feel their brand is “strong enough to attract and retain employees.”
As for the choice of buildings, first and second generation tech companies usually target Premium Grade A office space in business parks and the financial district, while smaller start-ups eye shophouses due to their lower rental cost as well as for portraying a young and cool image.
First generation tech firms consist of well-established companies with relatively low growth in headcount that have been operating in the Asia Pacific for over 20 years, while second generation tech firms are those that ventured into the region within the past 10 years, including Google, LinkedIn and Dropbox. These companies typically have a moderate increase in hiring, the report said.
The third generation comprises start-ups or recently created companies currently experiencing a rapid growth in manpower, it added.
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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