The technology sector is one of the most important occupier categories in Asia Pacific. For example, the region is now home to seven of the 22 global fintech unicorns—startups valued at more than US$1 billion.
The e-commerce industry has been a major contributor to office leasing demand and is projected to grow substantially in the near term.
Over the last few years, we’ve seen tech firms moving into Grade A office space in prime locations. The first of our tech series reports, “Tech firm office location choice—how does it work in Asia Pacific?”, examined the Silicon Valley-like pockets that have popped up across Asia in cities such as Shenzhen and Bengaluru.
Just as financial services companies cluster near stock exchanges, tech companies are also forming clusters.
The tech sector and their office needs
What do tech companies consider when deciding to locate their office? Let’s take a look:
- A reliable power supply: When you’re storing large volumes of data onsite and housing a large number of server racks, an unstable power supply is not an option.
- Room to grow: It’s no secret that tech is one of the fastest growing sectors. Tech firms frequently need more space as headcounts increase, and large floor plates provide the flexibility and room to grow your team and expand your business.
- Good transport links: Would you work for a company whose office is in a remote area with limited transport options? Chances are, you wouldn’t. Time spent commuting to work is unproductive. Prioritising your employee’s quality of life is key to keeping them engaged and productive, so ensure that your office building is easily accessible via public transport.
Attracting top talent is the key to the success
The importance of hiring and retaining top talent is the key to the success of tech firms. The location of the office is critical since it’s where employees will spend much of their working life.
Therefore Grade A offices and business parks with better facilities and located in prime districts are now the top options for many tech companies as they add allure and prestige. We now see tech firms occupying more than 20 per cent of Grade A space in markets such as New Delhi, Mumbai, Bengaluru, Chennai, as well as Tokyo, Bangkok, Manila and Sydney.
Coworking boosts collaboration
Tech firms thrive on innovation, and coworking creates an environment that supports collaboration, openness, knowledge sharing, innovation, and user experience. We’ve seen the number of coworking tenants worldwide increasing steadily. And this figure is expected to reach 3.8 million in 2020 according to research from Small Business Labs.
Startups and entrepreneurs typically favour coworking as a cost-efficient workplace solution as it is flexible and fosters collaboration. But it’s also becoming an attractive option for larger technology companies drawn to coworking’s potential to enhance teamwork and innovation within their organisations.
Bangkok falls 19 places to 49th most expensive location worldwide
Locations reliant on international tourism have seen their rental markets hit especially hard during the pandemic, resulting in some major drops in the rankings. Bangkok has fallen 19 places to 49th, while Hanoi saw a similar drop of 12 places to 81st.
Is There a Silver lining amid COVID-19?
Thinking of the future impact of this pandemic on office buildings, it may have already dawned on many of us that a majority of potential long-term trends and health measures will become permanent work-life features in the times to come.
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