NEWS & EVENTS ONLINE EXCLUSIVE

Tech firms may occupy up to a quarter of office space in Southeast Asia by 2030

As growth in Southeast Asia’s online economy gains pace, JLL projects that technology companies will drive office occupancy, potentially accounting for 15 to 25 per cent of annual gross office leasing volumes in the next decade, compared to about five to 10 per cent three years ago.

Technology companies have become a key office occupier group in the region, and they are frequently the earliest tenants to pre-commit to newly constructed buildings, according to JLL’s report Technology firms transform Southeast Asia.

“Given that technology firms will become a key source of office occupancy, this is an opportunity for real estate investors and developers to create space that will meet this need,” says Regina Lim, Head of Capital Market Southeast Asia Research, JLL. “Last year, the tech sector attracted over USD6 billion in funding, and the industry’s growth will contribute significantly to future office leasing volume, which we estimate will rise at six per cent annually amid a GDP growth rate of around five per cent.”

Southeast Asian economies are forecast to expand at five per cent annually until 2020, exceeding the global rate of 3.5 per cent. The region’s internet economy could be worth more than USD200 billion by 2025, with e-commerce seen as the fastest-growing segment. Along with an expanding middle class, this segment is predicted to rise at 30 per cent in the next five to 10 years to reach USD88 billion by 2025, based on a Google-Temasek study.

As internet companies developed their presence rapidly in the region in the last decade, e-commerce firms in particular have flourished in the past two years. The biggest global technology companies, including Alibaba, Facebook, Google and Sea, currently each occupy a total of 20,000 square metres to 50,000 square metres spread across three to five cities. Many of these companies have increased their headcount by 30 to 50 per cent annually over the last five to 10 years, says the JLL report.

OFFICE DEMAND ACCELERATES IN DEVELOPING COUNTRIES
Separately, co-working and flexible workspace operators have also contributed to the region’s office demand. Flexible workspaces have climbed by an estimated 40 per cent annually in the last three years and now take up two per cent of office stock in the region, compared with 0.5 to one per cent in 2015.

“We think in the next decade, e-commerce companies will continue to grow, together with flexible workspace and co-working operators,” says Regina Lim. “As e-commerce firms spread their footprint, we predict that gaming and e-sports platforms may become the next driver of office occupancy in Southeast Asia.”

According to JLL, the acceleration in office take-up by technology firms in the last three years has occurred mainly in Jakarta, Bangkok, Manila and Ho Chi Minh City. The sustained growth of these companies has been driven by strong socio-economic trends.

KEY LOCATION CONSIDERATIONS
With regards to location, technology firms in Singapore, Jakarta and Manila have tended to set up their operations in prime CBD areas. In Malaysia’s Kuala Lumpur, technology companies’ office demand has recently shifted towards the fringe areas due to the introduction of mass transit infrastructure. Similarly, in Bangkok, technology companies have chosen to operate out of traditional office locations along mass transit lines.

“Regionally, location preferences are influenced by access to talent pools, supportive government policies and access to customers. These provide for an innovative eco-system conducive to collaboration and entrepreneurship,” says Regina Lim.

Within each city, JLL has observed that technology companies emphasise the need for transport connectivity, integrated developments incorporating live, work and play elements and building prominence and signage.

“Technology companies have continued to seek high-quality office space to attract talent, and landlords in each Southeast Asian city will have to take notice of what this expanding category of occupier wants,” she concludes.

For more information, please download the Technology firms transform Southeast Asia report here. — Construction+ Online

yasbetir1.xyz winbet-bet.com 1kickbet1.com 1xbet-ir1.xyz hattrickbet1.com 4shart.com manotobet.net hazaratir.com takbetir2.xyz 1betcart.com betforwardperir.xyz alvinbet.help/ ritzobet.org betforward.com.co betforward.help betfa.cam 2betboro.com 1xbete.org 1xbett.bet romabet.cam megapari.cam mahbet.cam وان ایکس بت بت فوروارد