Tech firms may occupy up to a quarter of office space in Southeast Asia by 2030

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.

September 10, 2018

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.

Office demand accelerates in developing countries

Separately, co-working and flexible workspace operators have also contributed to the region's office demand. Flexible workspaces have climbed by an estimated 40 per cent annually in the last three years and now take up two per cent of office stock in the region, compared with 0.5 to one per cent in 2015.

"We think in the next decade, e-commerce companies will continue to grow, together with flexible workspace and co-working operators," says Ms Lim. "As e-commerce firms spread their footprint, we predict that gaming and e-sports platforms may become the next driver of office occupancy in Southeast Asia."

According to JLL, the acceleration in office take-up by technology firms in the last three years has occurred mainly in Jakarta, Bangkok, Manila and Ho Chi Minh City. Ms Lim explains that the sustained growth of these companies has been driven by strong socio-economic trends.

Key location considerations

With regards to location, technology firms in Singapore, Jakarta and Manila have tended to set up their operations in prime CBD areas. In Malaysia's Kuala Lumpur, technology companies' office demand has recently shifted towards the fringe areas due to the introduction of mass transit infrastructure. Similarly, in Bangkok, technology companies have chosen to operate out of traditional office locations along mass transit lines.

"Regionally, location preferences are influenced by access to talent pools, supportive government policies and access to customers. These provide for an innovative eco-system conducive to collaboration and entrepreneurship," says Ms Lim.

Within each city, JLL has observed that technology companies emphasise the need for transport connectivity, integrated developments incorporating live, work and play elements and building prominence and signage.

"Technology companies have continued to seek high-quality office space to attract talent, and landlords in each Southeast Asian city will have to take notice of what this expanding category of occupier wants," she concludes.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of over 91,000 as of March 31, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit

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