Bengaluru, Singapore, Shenzhen ranked top tech locations in Asia
TMT (technology, media and telecoms) groups have become a key driver of demand for office space. For large tenants, the submarkets are usually CBD or CBD fringe locations, while for smaller tenants they are often business parks. The factors supporting Bengaluru’s top rank include the city’s high long-run economic growth, high availability of office space, and large talent pool. As per Colliers Research, Beijing and Hyderabad as attractive alternatives, and Hong Kong emerging as a potential new option. “The Outer Ring Road (ORR) is still the preferred submarket in Bengaluru. However, the tech occupiers should consider Whitefield and North Bengaluru where quality supply is available at competitive rents, and infrastructure will steadily improve”, says RiteshSachdev, Managing Director, Occupier Services at Colliers International India. Due to challenges including overburdened infrastructure and limited vacancy in preferred submarkets such as the Outer Ring Road (ORR), Central Business District (CBD) and Secondary Business District (SBD), we expect office demand to shift to towards Whitefield, where quality supply is available at competitive rents, with the upcoming metro rail completion set to fuel demand further. Currently, North Bengaluru (defined as the micromarkets of Hebbal and Yelahanka) is not a tech cluster. However, we recommend that occupiers should consider this location for expansion and consolidation as infrastructure improves and supply becomes available. Hyderabad Strong fundamentals favouring the Hyderabad commercial office market are attractive office rents, strong GDP growth forecasts (second highest among the cities after Bengaluru) and well-developed infrastructure. We believe that an influx of occupiers from the IT-ITeS sector and flexible workspace operators will further strengthen the demand for office space in coming years. The most prominent office destination in Hyderabad, the HITEC City, holds around 40% of city's Grade A stock and is witnessing tapering vacancy levels owing to robust demand from technology occupiers. We expect the spill-over demand from HITEC City to be met by Gachibowli, an adjacent micromarket as occupiers need not go any further for talent. The peripheral micromarket, Uppal, ought to attract occupiers’ interest with competitive rents and upcoming supply over the next two years. The market has an established residential area and is well connected by metro rail.
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