– Traditional office space: London leads the ranking whilst Bangkok offers the greatest value
– Co-working space: Asia-Pacific cities offer largest cost-savings vs. traditional space, with Brisbane leading
15 September 2016, Singapore – Knight Frank, the independent global property consultancy, launches new research as part of the Global Cities: The 2017 Report, examining the costs of leasing and fitting-out 600 sq ft of office space** in the tech and creative districts* of the world’s leading cities.
Highlights of research results:
Traditional office space:
• Of the 27 cities analysed including nine from Asia-Pacific, London tops the rankings as the city where tech start-ups face the highest real estate costs. This is followed by New York and San Francisco.
• Hong Kong, Beijing and Singapore are the only Asian cities in the top 10 chart. For a tech startup setting up in these Asian cities, the rental costs would be over 40% less than London.
• For tech start-ups opting for the co-working spaces based on a four-desk collaborative open plan environment, Brisbane offers the best cost savings, offering an astounding 79.4% discounts versus traditional office space.
• The top five cities offering substantial cost savings in a co-working environment after Brisbane are all from Asia-Pacific: Beijing (74.1%), Bengaluru (72.0%), Bangkok (66.2%), and Sydney (64.5%).
• For Bangkok, tech start-ups face the lowest real estate costs globally, whether looking at traditional space or co-working space.
Nicholas Holt, Head of Research, Asia Pacific, Knight Frank Asia Pacific, says, “With technology and creative industries moving to the heart of office markets globally, it is perhaps unsurprising that the top three tech districts in our rankings represent the cities with the largest technology clusters. London, New York and San Francisco have all benefitted over the last decade from the huge growth in these sectors, as the brightest and the best entrepreneurs look to cluster into districts where they can benefit from the cross-pollination of ideas and mutually beneficial synergies.
“In Asia, it is the Chinese cities of Beijing and Shanghai that are seeing some of the most innovation and creativity in the technology sector, with companies like Tencent and Alibaba taking significant amounts of office space in the major Tier-1 markets.
“In all of the Global Cities, co-working spaces, in their various guises, continue to be an attractive option for tech start-ups – offering the flexibility, support and infrastructure for nascent companies. The cost savings offered by such a work environment can also be very compelling, with co-working spaces in the Asia-Pacific region offering some of the most significant cost differentials when compared to traditional office space.
“Whether internationally renowned co-working operators such as WeWork – which has now opened in this region – or more local incubators or co-sharing spaces, there is an increasing amount of options for tech and creative start-ups. The possibility of working shoulder-to-shoulder with other like minded start-ups has proved to be a significant draw that appeals to these types of industries.
“With the rate of technological change increasing and adoption rates moving at a faster pace, technology and creative industries will be at the forefront of much office demand over the coming years.”
Calvin Yeo, Executive Director and Head of Office Advisory, Knight Frank Singapore, adds, “Going forward, the providers of technology and creative business park space in Singapore cannot assume that the demand for traditional leases will increase with the growth of the sector. It is conceivable that whilst start-ups led the demand for co working centres, post start-ups could evolve the demand for hybrid co-working buildings and districts offering a combination of fixed and flexible lease arrangements in a collaborative environment.”
To download the report, please click: www.knightfrank.com/globalcities