Bengaluru has emerged as the top five technology centres in Asia Pacific region, according to a report by Colliers. Hyderabad ranked in the top 10 list in the report titled 'Growth Engines of Innovation: How Asia Pacific Technology Hubs are Reshaping Regional Real Estate'.
The study ranks the most attractive technology submarkets within major APAC (Asia-Pacific) cities, which should serve as a navigation tool for technology groups, as they plan their expansion. Beijing bagged the top spot in the list followed by Shanghai, Bengaluru, Shenzhen, and Singapore.
Among established technology submarkets in major APAC cities, the report highlights Shangdi in Beijing. Among upcoming submarkets, it further highlights Yangpu in Shanghai, Hitec City (Suburban Business District) in Hyderabad as well as Sydney's CBD South, Whitefield and North Bengaluru in Bengaluru.
Commenting on the report, Arpit Mehrotra, Managing Director, Office Services (South India),?said, "While Bengaluru has been ranked in the top five technology centers in APAC, we also witness Hyderabad in the Top ten list. 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% to 20% cheaper than in Bengaluru. Overall, we foresee the South India markets leading the pack in terms of office leasing demand for the technology sector," he added.
Today, technology is the most important business sector globally, making up 65% of the world's top 20 public companies by market capitalisation.
Technology occupiers are expected 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 $10 billion in APAC real estate assets.
"Demand from technology occupiers has been the mainstay of Indian commercial real estate. After reaching highs of 65-70% share in annual leasing volumes in the 1990s and 2000s, though the share declined to around 45-50% share in the last decade, technology occupiers are expected to increase their share in the post pandemic period," said Siddhart Goel, Senior Director & Head of Research, (India).
"Also, Indian office real estate is expected to maintain its competitive advantage over its APAC peers as over 45% of the submarkets in top established and upcoming categories are from the cities of Bengaluru, Chennai, Delhi NCR, Hyderabad and Pune. This is further supported by our research that shows that about 70% of the tech occupiers are MNCs compared to an average of 30-40% in many other APAC cities," he noted.
Delhi NCR also ranks in top ten 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 micromarkets of Noida Expressway and Golf Course Extension Road in Gurugram have been featured amongst the top ten 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," said Bhupindra Singh, Managing Director, Regional Tenant Representation (India).
"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," he added.
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