Rapid Expansion of Technology Sector Reshapes Property Market in Asia Pacific

Large technology companies, especially Chinese technology firms, have been very active in direct property investment and development across the Asia Pacific.

Shanghai, China (Foto: Dok. Pixabay.com)
Shanghai, China (Foto: Dok. Pixabay.com)

RealEstat.id (Jakarta) - Colliers International,  leading diversified professional services and investment management company, released the  Growth engines of innovation: How Asia Pacific’s technology hubs are reshaping regional real estate report, an in-depth analysis of how the growth of the Asia Pacific technology sector is transforming the region’s property markets.

The report provides a new ranking of the most attractive technology submarkets within major Asia Pacific (APAC) cities, which should serve as a navigation tool for technology groups, as they plan expansion. Since these submarkets ought to attract strong occupier demand, property owners should also focus on these districts for investment and development opportunities.

Sam Harvey-Jones, Managing Director, Occupier Services Colliers Asia, commented: “The technology sector is the key driver of office leasing demand in major APAC cities. While demand from MNC technology occupiers remains important, we expect APAC technology occupiers to predominantly drive demand and shape major office markets over the next five years.”

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Today, technology is the most important business sector globally, making up 65% of the world’s top 20 public companies by market capitalisation. We expect technology occupiers to account for 20% to 25% of demand for leased office space in the APAC region over the next five years.

Asia’s technology giants, in particular, are expanding quickly, and have become a major driver of leasing demand. Many Asian technology companies, especially Chinese technology firms, have also become very active in investment and development of real estate. In 2020 alone, technology companies acquired nearly USD10 billion in Asia Pacific real estate assets.

Terence Tang, Managing Director, Capital Markets & Investment Services Colliers Asia,commented: “Large technology companies, especially Chinese technology firms, have been very active in direct property investment and development across the Asia Pacific region. These firms are now a major new class of owner-occupier. We work closely with this group of occupiers, together with property owners, in providing advice to reposition aging assets and undertake joint redevelopment, to fulfil existing and expanding occupational needs of these technology firms, spanning offices, logistics and warehousing facilities, as well as data centres.”

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Beijing, Shanghai, Bengaluru, Shenzhen and Singapore currently rank as the top five technology centres in Asia Pacific; they offer a compelling balance of infrastructure and talent for occupiers, and are well positioned to deliver future growth and investment opportunities for owners. Other cities are developing strengths in specific areas of technology, e.g., Seoul and Hong Kong in fintech, while new centres such as Hyderabad and Sydney are emerging. Among established technology submarkets in the major Asia Pacific cities, we highlight Shangdi in Beijing. Among upcoming submarkets, we highlight Yangpu in Shanghai, Whitefield and North Bengaluru in Bengaluru, as well as Sydney’s CBD South.

The ongoing expansion of the Asia Pacific technology sector creates opportunities for property owners beyond rental growth, as the technology sector increasingly becomes a direct investor in Asia Pacific real estate. Investors should consider technology companies as alternative buyers of aging assets or partner with these firms to redevelop their assets. Owners with landbanks and development capabilities in areas like logistics warehousing or data centres should consider going into joint ventures with technology companies to develop their assets, whereas investors with passive capital may invest in real estate funds set up by technology companies that are open to third-party investment.

Redaksi@realestat.id

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SKYE Suites Hotel Green Square, Sydney (Foto: Dok. Crown Group)
SKYE Suites Hotel Green Square, Sydney (Foto: Dok. Crown Group)
Senayan, Jakarta (RealEstat.id)
Senayan, Jakarta (RealEstat.id)
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Online Shopping (Foto: Dok. Pixabay.com)
Office towers in CBD Jakarta. (Photo: RealEstat.id)
Office towers in CBD Jakarta. (Photo: RealEstat.id)