Internet firms catalyst for Asia office growth
Social media and e-commerce firms are driving office leasing activity in Asia after they took up the most new office space in the second quarter, overtaking financial companies, Cushman & Wakefield Inc says.
Internet companies such as LinkedIn Corp and Amazon.com Inc made up 21% of the space taken up in the second quarter, compared with the 14% by financial companies, according to the New York-based real estate services firm. The new space they occupied was 1.1 million sq ft, more than the previous three quarters combined, Cushman data shows.
New technology firms are emerging to fill the gap in the Asia office market that has been left by multinational banks, many of which have downsized or slowed expansion amid a tighter regulatory environment.
Asia was currently the fastest growing ecommerce region globally, with China’s online retail sales volumes expected to hit US$1.5 trillion this year, Cushman said.
“One of the things that has been a catalyst of the recovery in the United States is the growth in this sector,” said Sigrid Zialcita, the Singapore-based managing director of research at Cushman. “We’re seeing that also cascade to Asia-Pacific.”
LinkedIn leased space that was given up by Barclays Plc in Singapore’s financial district, people familiar with the matter said in May. Seattle-based Amazon and JD.com, China’s largest e-commerce company after Alibaba Group Holding Ltd, took up more than 300,000 sq ft in Beijing during the second quarter, while Facebook Inc also set up its office in the Chinese capital.
The overlapping of social media and e-commerce industries was driving acquisitions globally, a trend that would be an important driver for office leasing in Asia, Zialcita said. — Bloomberg