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Underpinned by the innovation in the financial sector via new financial technology as well as the growth of mobile devices and e-commerce, startups emerged as a new category of occupiers in cities such as Bengaluru and Mumbai, revealed a JLL report.
In fact, more tech firms are taking on unconventional formats like co-working and industrial spaces.
This comes as the Asia Pacific region witnessed a significant increase in the number and size of startups as well as the proportion of high-quality office and business park space occupied by them.
Currently, the region is “home to seven of the 22 global fin-tech unicorns – meaning startups valued at more than USD1 billion”.
“While there is a greater utilisation of co-working space, tech startups are a future source of Grade A office leasing demand and this is an opportunity for real estate investors and developers to create space that will meet this need,” said Dr Megan Walters, Head of Research, Asia Pacific at JLL.
“Technology companies continue seeking high quality office space to attract talent, and we’ve seen a significant number of tech occupiers upgrading their premises from serviced to proper offices, and from Grade B to Grade A space. Landlords are sitting up and taking notice of what this new category of occupier wants.”
When looking for office space, tech firms prefer buildings with reliable power supply.
JLL noted that power supply was listed as a key consideration in nearly all of the developing markets it surveyed. Nonetheless, it was listed in only two of the five mature markets surveyed, which include Seoul, Tokyo, Singapore, Hong Kong and Sydney. This indicates that “a sufficient and stable power supply was more readily available in these markets”.
“The importance of a high-quality and stable power supply to tech companies cannot be overstated,” said Christopher Clausen, Associate Research Director, Asia Pacific at JLL. “Many tech firms continue to store large volumes of data onsite meaning they are housing a large number of server racks within their office.”
Aside from reliable power supply, tech firms “also want large floor plates that allow them flexibility in layout,” said Clausen.
“In addition, these companies are putting a priority on quality of life for their employees, so transport connectivity is another important factor.”
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