- Colliers International, a global leader in commercial real estate services today released its latest research report
The report also recommends the best urban locations for technology firms. Bengaluru, Singapore and Shenzhen stand out as top choices for starting or expanding technology operations in Asia. Modest long-run growth prospects hold down developed cities like Tokyo and Taipei for the sector. While emerging cities offer high growth potential and low operating costs, they tend to score lower on employment criteria and human aspirational metrics.
Tech Trends in Asia
Acquiring talent is a key challenge for tech firms in Asia. Talent is concentrated in specific markets, notably Chindia (China and India), which also offer high growth. To retain talent, tech firms need to move toward the CBD or CBD fringe. Additionally, artificial intelligence (AI) threatens demand for workforce space, but drives productivity growth and returns. These conclusions led us to weigh growth and availability of talent highly in our “Top Locations” scoring.
Top Locations for Tech Firms
Bengaluru’s (Score: 68%; Position: #1) greatest strengths are socio-economic, set to be the fastest-growing city in Asia over the next five to ten years, and benefits from a wide and deep talent pool. Bengaluru also boasts the largest stock of Grade A office space in Asia after Tokyo, low staff costs and office rents, and low cost of living. However, the city scores less well on quality of office accommodation and quality of infrastructure.
Singapore (Score: 63%; Position: #2) comes in second place as it scores highly on the socio-economic index, due largely to its strong talent pool, and on aspirational measures including personal tax rate, safety and living quality. Singapore is expected to continue to benefit from its position as a well-connected financial and communications hub for South East Asia and APAC operations.
Shenzhen’s (Score: 61%; Position: #3) high ranking comes as no surprise as it currently reigns as China’s technology capital. Heavy investment in R&D has broadened the city’s tech base far beyond hardware manufacturing. Shenzhen scores highly on property factors due to moderate staff costs, ample office stock, flexible workspace, and planned new supply. Shenzhen has also surpassed Hong Kong by GDP and is expected to benefit further from closer integration of the Greater Bay Area hubs.
Alternative Tech Locations
Beijing (Score: 60%; Position: #4) scores highly on economic scale and growth potential and is known for its abundance in talent. Staff costs are moderate despite CBD rents being the highest in China. The city is well-placed to strengthen its position as a leading centre of Artificial Intelligence.
Hyderabad (Score: 59%; Position: #7) ranks highly on growth potential like all Indian cities, but lower on other socio-economic factors and does not match Bengaluru as a source of talent. However, tax rates and cost of living are low and the city scores better than many other Indian cities on human factors.
Wild Card Tech Location
Hong Kong (Score: 59%; Position: #8) is not typically viewed as an innovation hub for tech occupiers; however, Hong Kong is becoming more appealing for several reasons which include connectivity with Shenzhen and South China, recent expansion in Hong Kong by big tech firms such as Facebook and Alibaba, and accelerating investment in Fintech in the city.
The overall scores range between 67.9% at the high end and 53.0% at the low end, with Bengaluru coming in first place. This reflects Bengaluru’s high score on socio-economic factors (due to high expected long-run economic growth), on office accommodation (due to ample office stock), and employer costs (due to low staff costs and low rents), as well as a reasonable score on human factors (due to low cost of living).
About Colliers International Group Inc.
Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIGI) is an industry-leading real estate services company with a global brand operating in 69 countries and a workforce of more than 13,000 skilled professionals serving clients in the world’s most important markets. Colliers is the fastest-growing publicly listed global real estate services company, with 2017 corporate revenues of $2.3 billion ($2.7 billion including affiliates). With an enterprising culture and significant employee ownership and control, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting.
Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help clients accelerate their success. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 13 consecutive years, more than any other real estate services firm. Colliers has also been ranked the number one property manager in the world by Commercial Property Executive for two years in a row.
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