South Indian markets lead the pack in terms of office-leasing demand for the technology sector in the APAC region. Bengaluru has emerged as the top five technology centres in the APAC region while Hyderabad is ranked in the Top 10 list, a report by Colliers titled 'Growth Engines of Innovation: How Asia Pacific Technology Hubs are Reshaping Regional Real Estate' has said.
The report ranks the most attractive technology submarkets within major APAC cities, which should serve as a navigation tool for technology groups, as they plan their expansion.
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, the report said.
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, are Shangdi in Beijing. Among upcoming submarkets, Yangpu in Shanghai, Whitefield and North Bengaluru in Bengaluru, Hitec City (Suburban Business District) in Hyderabad, as well as Sydney’s CBD South, call the shots, it said.
Among upcoming Indian submarkets, Colliers highlights Whitefield and North Bengaluru in Bengaluru, Off Suburban Business District in Hyderabad, and Noida Expressway and Golf Course Extension Road (Gurguram) in Delhi NCR, among others.
“Offering a compelling balance of infrastructure and talent for occupiers and well-positioned to deliver future growth and investment opportunities for owners, ORR in Bengaluru is the epicenter of commercial leasing. In addition, while smaller than Bengaluru, Hyderabad is also attracting talent and multinational companies to the city. Rents are 15-20 percent cheaper than in Bengaluru,” said Arpit Mehrotra, Managing Director, Office Services (South India).
Delhi-NCR is also ranked among the top 10 cities by property factors.
In addition to rent and rental growth, a key determinant for technology occupiers to grow is the availability of quality space at competitive rentals. With ample space in new or outlying districts, Bengaluru, Hyderabad, Shenzhen, Delhi NCR and Manila, are the top markets by property factors.
Delhi NCR’s micro-markets of Noida Expressway and Golf Course Extension Road in Gurugram have been featured amongst the top 10 emerging submarkets in the APAC region for tech occupiers, which is expected as technology companies are coming out of an extended work from home scenario and raring to go and perform in an office setup, it said.
"We foresee buoyancy in the Delhi NCR market, and once the restrictions are fully lifted, the market will witness an upswing. Colliers forecasts an increase in uptake from the SME segment, moving towards economical micro-markets in the NCR, like NOIDA and Golf Course Extension,” said Bhupindra Singh, managing director, Regional Tenant Representation (India).
Colliers expects technology occupiers to account for 20-25 percent 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 $10 billion in APAC real estate assets, the report said.
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