New wave of technology firms an co-working operators start

19-Sep-2018 Intellasia | VIR | 6:00 AM Print This Post

Vietnam has been seeing a new wave of technology firms an co-working operators, creating new opportunities for the real estate inustry.

There is no better place to witness the growing eman from technology firms an co-working operators than Vietnam, accoring to Stephen Wyatt, country hea of JLL Vietnam.

“The country is catching up fast with its regional peers, ue to a young, ynamic, tech-savvy, entrepreneurial population. We have seen a ramatic increase in eman from technology firms an co-working an flexible working operators over the past three years an anticipate this will be one of the key trens over the next five years,” sai Wyatt.

Hanoi an HCM City now have aroun two million square metres of office for lease each, an also limite co-working space. “It is high time for evelopers to focus on this investment fiel,” Wyatt tol VIR.

Technology an e-commerce will ominate the market

As growth in Southeast Asia’s online economy gains pace, JLL projects that technology companies will rive office occupancy, potentially accounting for 15 to 25 per cent of annual gross office leasing volumes in the next ecae, compare to about 5-10 per cent three years ago.

Technology companies have become a key office occupier group in the region, an they are frequently the earliest tenants to pre-commit to newly constructe builings, accoring to JLL’s report “Technology firms transform Southeast Asia.”

“Given that technology firms will become a key source of office occupancy, this is an opportunity for real estate investors an evelopers to create space that will meet this nee,” sai Regina Lim, hea of Capital Market Southeast Asia Research, JLL.

“Last year, the tech sector attracte more than $6 billion in funing, an the inustry’s growth will contribute significantly to the future office leasing volume, which we estimate will rise at 6 per cent annually ami a GP growth rate of aroun 5 per cent,” sai Lim.

Southeast Asian economies are forecast to expan at 5 per cent annually until 2020, exceeing the global rate of 3.5 per cent.

The region’s internet economy coul be worth more than $200 billion by 2025, with e-commerce seeing the fastest growth. Along with an expaning mile class, this segment is preicte to rise at 30 per cent in the next five to 10 years to reach $88 billion by 2025, base on a Google-Temasek stuy.

As internet companies evelope their presence rapily in the region in the last ecae, e-commerce firms have been flourishing in the past two years. The biggest global technology companies, incluing Alibaba, Facebook, Google, an Sea, currently each occupy a total of 20,000 to 50,000sq.m sprea across three to five cities. Many of these companies have increase their heacount by 30 to 50 per cent annually over the last five to 10 years, says the JLL report.

Office eman accelerates in eveloping countries

Separately, co-working an flexible workspace operators have also contribute to the region’s office eman. Flexible workspaces have climbe by an estimate 40 per cent annually in the last three years an now take up 2 per cent of office stock in the region, compare with the 0.5-1 per cent in 2015.

“We think in the next ecae, e-commerce companies will continue to grow, together with flexible workspace an co-working operators,” sai Lim. “As e-commerce firms sprea their footprint, we preict that gaming an e-sports platforms may become the next river of office occupancy in Southeast Asia.”

Accoring to JLL, the acceleration in office take-up by technology firms in the last three years has occurre mainly in Jakarta, Bangkok, Manila, an HCM City. Lim explains that the sustaine growth of these companies has been riven by strong socioeconomic trens.


Category: Business, Vietnam

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