A variety of internet-based companies are helping to increase demand for quality office space in different parts of Asia, according to the real estate consultancy and analyst firm Cushman & Wakefield.
The company says that social media businesses, including the likes of LinkedIn, and ecommerce giants such as Amazon, are among the organisations helping to spur rental activity in a number of Asian office space markets.
In fact, demand for offices among technology-related and internet-based businesses in Asia is now so strong that it is outstripping demand among financial service companies, which have long been the mainstay of Grade A office markets across much of the region.
According to figures from Cushman & Wakefield as quoted by Bloomberg, 21 per cent of office space taken up in the second quarter of 2014 went to internet-based companies, while only 14 per cent was newly leased by finance firms of various sorts.
But the figures suggest the trend for big internet firms setting up in Asia has arrived with something of a surge, with these businesses having signed up to occupy 1.1 million square feet of space in the second quarter alone, which amounts to more than was taken up during each of the three previous quarters combined.
Explaining the nature of the trends currently being seen in parts of Asia, Cushman & Wakefield’s experts suggested that new technology companies are in many cases taking up occupation of office space that was previously used by multinational banks or finance firms that have had to downsize in recent months or years. Plus, expansion among internet-based businesses in some cases is being fed by the rapid growth of ecommerce across Asia, with the region reckoned to have the fastest growing ecommerce sector in the world at present.
“One of the things that has been a catalyst of the recovery in the US is the growth in this sector,” said Sigrid Zialcita, the Singapore-based managing director of research at Cushman. “We’re seeing that also cascade to Asia Pacific.”
In May of this year, people familiar with the matter revealed that LinkedIn, the social network for professionals, had moved into office space in Singapore financial district that was previously occupied by Barclays Bank. Meanwhile, Amazon and JD.com collectively took up in excess of 300,000 square feet of office space in Beijing during the second quarter of 2014.