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Rapid expansion of Asia Pacific technology sector reshapes regional real estate

Fast-growing APAC technology market creates abundant opportunities for occupiers and owners; Colliers identifies most attractive established and upcoming technology submarkets in APAC



  • Technology occupiers should account for 20%-25% of APAC office leasing demand in the next five years. Our research identifies the most attractive technology submarkets across APAC to help occupiers plan their expansion
  • Large Asian technology firms are now a major new class of owner-occupier; Chinese technology companies, especially, have been active in direct investment in real estate assets, platforms and funds
  • The top five technology centres in APAC are Beijing, Shanghai, Bengaluru, Shenzhen and Singapore. 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, we highlight Shangdi in Beijing. Among upcoming submarkets, we highlight Yangpu in Shanghai, Whitefield and North Bengaluru in Bengaluru, and Sydney’s CBD South
  • The emergence of technology groups as large owner-occupiers creates a new source of capital for investors planning asset disposals, as well as new opportunities for joint ventures and partnerships for developers.


SINGAPORE, 22 June 2021 –
Leading diversified professional services and investment management company Colliers today 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 (APAC) technology sector is transforming the region’s property markets.

The report provides a new ranking of the most attractive technology submarkets within major 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 | 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.”

Technology firms both the fastest-growing occupiers of space and a new class of owner-occupier

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 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 US$10 billion in APAC real estate assets

Terence Tang, Managing Director, Capital Markets & Investment Services | Asia, commented: “Large technology companies, especially Chinese technology firms, have been very active in direct property investment and development across the APAC 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.”

Technology firms both the fastest-growing occupiers of space and a new class of owner-occupier

Beijing, Shanghai, Bengaluru, Shenzhen and Singapore currently rank as the top five technology centres in APAC; 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 APAC 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.

Wave of demand from technology occupiers to create new oppportunities for owners

The ongoing expansion of the APAC technology sector creates opportunities for property owners beyond rental growth, as the technology sector increasingly becomes a direct investor in APAC 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.


Find out more about, and download the interactive report Growth engines of innovation: How Asia Pacific's technology hubs are reshaping regional real estate here.

 

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Media Contact:

Wallace Goh