As growth in Southeast Asia’s online economy gains pace, JLL projects that technology companies will drive office occupancy, potentially accounting for 15 to 25 per cent of annual gross office leasing volumes in the next decade, compared to about five to 10 per cent three years ago.
Technology companies have become a key office occupier group in the region, and they are frequently the earliest tenants to pre-commit to newly constructed buildings, according 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 and developers to create space that will meet this need,” says Regina Lim, Head of Capital Market Southeast Asia Research, JLL. “Last year, the tech sector attracted over US$6 billion in funding, and the industry’s growth will contribute significantly to future office leasing volume, which we estimate will rise at six per cent annually amid a GDP growth rate of around five per cent.”
Southeast Asian economies are forecast to expand at five per cent annually until 2020, exceeding the global rate of 3.5 per cent. The region’s internet economy could be worth more than US$200 billion by 2025, with e-commerce seen as the fastest-growing segment. Along with an expanding middle class, this segment is predicted to rise at 30 per cent in the next five to 10 years to reach US$88 billion by 2025, based on a Google-Temasek study.