JLL is proud to be a partner of The World Economic Forum on ASEAN 2018 which will be held in Hanoi from the 13th-15th September and we are sending a full delegation from around the region to support this significant event. In conjunction with this event we have released a research paper highlighting how technology firms are transforming the office landscape in SEA. Vietnam is currently experiencing a new wave of technology firms and co-working operators which is creating new opportunities for the real estate industry in Vietnam. JLL is at the forefront of innovation and we have very ambitious plans to be the market leader in technology and data within the real estate industry the next 5 years.
VIETNAM, 10 September 2018 – 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.”
Stephen Wyatt, Country Head of JLL Vietnam comments, “There is no better place to witness the growing demand from Technology firms and Co-working operators than Vietnam. The country is catching up fast with its regional peers, due to a young, dynamic, tech-savvy, entrepreneurial population. We have seen a dramatic increase in demand from technology firms and co-working/flexible working operators over the past 3 years and anticipate this will be one of the key trends over the next 5 years.”
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.
As internet companies developed their presence rapidly in the region in the last decade, e-commerce firms in particular have flourished in the past two years. The biggest global technology companies, including Alibaba, Facebook, Google and Sea, currently each occupy a total of 20,000 sqm to 50,000 sqm spread across three to five cities. Many of these companies have increased their headcount by 30 to 50 per cent annually over the last five to 10 years, says the JLL report.
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