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Technology companies in Asia Pacific are occupying a substantial share of Grade A office buildings and business parks, said JLL, after analysing occupancy across 17 Asia Pacific cities.
Much like financial services firms clustered near stock exchanges, tech companies are “building hubs in Asia to aid their business growth, with prime office locations offering better access to talent pools”, it said.
JLL noted that firms, including the major hardware designers, e-commerce and internet players, are no longer relegated to less expensive, lower quality buildings.
In fact, tech firms occupy more than 20 percent of Grade A space in some markets, such as in the Indian cities of Mumbai, New Delhi, Chennai and Bengaluru, as well as Bangkok, Tokyo, Sydney and Manila.
So far, the largest tech occupier categories comprise internet firms like Google and Baidu, e-commerce companies like Flipkart and Amazon, as well as hardware designers similar to Cisco and Juniper.
“The tech sector is making a substantial contribution to occupier demand for investment grade office space,” said Chris Clausen, Senior Research Manager at JLL Asia Pacific.
“In Asia Pacific, one in six square metres of Grade A office space was leased by tech firms, supporting rent growth across the region and rental income growth achieved by investors in Asia Pacific office assets.”
And as tech companies expand rapidly within the region, prime office locations have emerged as key in attracting and retaining talent.
“Technology firms recognise the importance of hiring and retaining key talent to the success of their business, therefore, the location of the office where they will spend much of their working life is critical,” noted Clausen.
Other factors driving office location choice include supportive government policies and cost.
“Supportive government polices include incentives such as tax holidays and rental rebates, and has been observed to be particularly attractive to companies. Cost remains an important factor too, with several tech companies exploring shifting data centres off-site as one of their cost-cutting strategies,” said JLL.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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