Bengaluru has emerged as the top five technology centres in the Asia Pacific region including Beijing, Shanghai, Shenzhen and Singapore in a report published by Colliers, a diversified professional services and investment management firm with a global presence. Hyderabad is another Indian tech city that could find a place in the top 10 list of the report titled ‘Growth Engines of Innovation: How Asia Pacific’s Technology Hubs are Reshaping Regional Real Estate property markets.’
As the Asian technology groups make plans for their future business expansion through company formation in India and other regions, the in-depth study made by Colliers should come in handy for ascertaining the most valuable technology submarkets amongst the Asia-Pacific (APAC) cities. The report also provides opportunities to the property owners who can focus on these cities for future investment and property development opportunities.
While the report mentions Shangdi in Beijing as one of the already established submarkets; some other APAC cities including Yangpu in Shanghai, Hitec City in a Suburban Business District in Hyderabad, Sydney’s CBD South Whitefield and North Bengaluru in Bengaluru are highlighted as the developing real estate submarkets. Tech companies wanting company formation in Bangalore can obtain valuable insights from this detailed report.
“While Bengaluru has been ranked in the top five technology centres 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 epicentre of commercial leasing,” noted Arpit Mehrotra, the Managing Director, Office Services-South India in his comments.
“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,” Mehrotra emphasized.
The technology sector is presently considered the most important business sector across the world comprising 65% of the top 20 public companies globally by market capitalization.
Almost 20% to 25% of leased office space demand will be contributed by the tech companies in the APAC region over the next five years as many Asian technology companies especially the Chinese have started investing and developing real estate to rapidly expand their businesses. Technology companies have already pumped in almost 10 billion USD for acquiring APAC real estate assets.
Senior Director and Head of Research- India operation, Siddharth Goel noted, “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.”
“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,” Mr Goel remarked.
Besides the rent and rental growth, the availability of quality spaces at competitive rentals also decides the future growth prospects of technology occupiers and Delhi NCR has also been named amongst the top ten cities by property factors in outside cities with considerable office spaces.
Bengaluru, Hyderabad, Shenzhen, Delhi NCR and Manila have also been identified as top markets by property factors with large space in new or outlying districts.
“Delhi NCR’s micro-markets 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,” remarked Managing Director, Regional Tenant Representation-India, Bhupindra Singh.
He also emphasized saying, “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.”
