China-Australia relations: tech firms snub Australian office market amid Beijing’s spat with Canberra over trade, Covid-19 handling

The icy relations are unlikely to encourage mainland tech giants to view Australia as a favourable investment destination, say analysts

Vacancy rates in cities like Sydney have soared amid the pandemic, a trend that could have been eased by Chinese tech firms taking up space

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Aerial view of Canberra, the capital of Australia, whose government has been at loggerheads with Beijing for the last couple of years. Photo: Shutterstock

Published: 7:30am, 8 Jun 2021Updated: 9:47am, 9 Jun 2021

Australia’s office property market has taken a battering from the Covid-19 pandemic, with vacancy rates in cities like Sydney soaring as companies cut back their overheads and more people work from home.

In that respect, it is no different from most developed countries. However, Australia might not be faring so badly had its government not fallen foul of Beijing’s wrath, according to analysts.

“The recent political tension between Australia and China may be an obstacle for Chinese tech companies to increase their footprint in Australia,” said Sing Tien Foo, director of the Institute of Real Estate and Urban Studies at the National University of Singapore. “The expansion of office space by Chinese tech firms in Australia’s market is not likely to occur in the short term.”

Technology companies are an increasingly dominant force in the office-leasing market, and none more so than China’s internet giants.

Tech companies are likely to account for over 5.5 million square metres or 20 per cent of Asia-Pacific’s office space by 2025, with those from mainland China likely to contribute 4 million square metres, according to a study released in February by property consultancy Colliers.

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