Bengaluru ranked as one of the Top 5 technology centers in Asia Pacific: Colliers India

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 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.

Arpit Mehrotra, Managing Director, Office Services (South India), commented: “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.”

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. Colliers expects technology occupiers 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 US$10 billion in APAC real estate assets.

Occupiers to expand further in key APAC technology hubs, attracting owner investment

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, Hitec City (Suburban Business District) in Hyderabad as well as Sydney’s CBD South.

Siddhart Goel, Senior Director & Head of Research, (India), commented: “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.”

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.

Bhupindra Singh, Managing Director, Regional Tenant Representation (India), commented: “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. 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.”

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