Growing tech sector occupying prime office locations in Asia Pacific

PETALING JAYA (Jan 12): Riding on the Silicon Valley wave, technology firms across Asia are building hubs in the region to aid their business growth, occupying prime office locations, according to international real estate firm JLL.

In its latest report entitled “Tech firm office location choice — how does it work in Asia Pacific?”, JLL noted that tech firms including hardware designers, Internet and e-commerce companies are the three largest tech occupier categories across 17 cities in Asia Pacific.

“Tech companies are occupying a substantial share of Grade A office buildings and business parks. In some markets, tech firms occupy more than 20% of Grade A space, including in Indian cities like New Delhi, Mumbai, Bengaluru, Chennai as well as Tokyo, Bangkok, Manila and Sydney,” noted the report.

The top three factors driving companies’ office location choice include access to talent, supportive government policies, and cost.

“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.

“Supportive government policies include incentives such as tax holidays and rental rebates, and have 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 Asia Pacific senior research manager Christopher Clausen.

Clausen added that one in 6m² 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.

“The tech sector is making a substantial contribution to occupier demand for investment grade office space,” he added.

According to the report, technology tenants account for at least 10% of occupied stock across office and business parks in most Asia-Pacific cities.