Tech firms are flocking to Singapore, filling up CBD offices once dominated by banks

Easy access to funding for tech firms including start-ups makes city state an appealing destination

US and Chinese tech giants are capitalising on its position as a gateway to Southeast Asia’s smartphone-savvy population

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The financial industry used to be the main driver of office demand in Singapore, taking up almost half of new space between 2004 and 2014. Photo: Bloomberg

Published: 3:34pm, 28 May 2021Updated: 4:21pm, 28 May 2021

A new crowd is flocking to Singapore’s offices: technology companies. Steadily growing their footprint in recent years, tech behemoths are chipping away at the dominance of banks in the island-state’s central business district. Exemplifying the trend, Amazon recently leased space in Asia Square Tower 1, while ByteDance secured floors in the landmark One Raffles Quay.

That’s good news for developers and real estate investors at a time when the coronavirus pandemic is upending work practices around the world, raising questions about the future of the office. Citigroup, DBS and Mizuho are among banks that are trimming space in the Southeast Asian hub, accelerating a trend that began even before the health crisis.

The financial industry used to be the main driver of office demand in Singapore, taking up almost half of new space between 2004 and 2014. That share plunged to 26 per cent between 2015 and 2020, according to estimates by real estate consultancy firm Jones Lang LaSalle. Over the same period, the portion obtained by tech firms almost tripled to 22 per cent.

Financial firms were forced to trim workspace because of the pandemic and “that’s probably not a great thing”, said Alan Miyasaki, head of Asia real estate acquisitions at Blackstone. “But that vacancy was snapped up really quickly because there was a lot of these technology firms coming in.”

US and Chinese tech giants are capitalising on Singapore’s position as a gateway to Southeast Asia’s 650 million smartphone-savvy population.

Amazon is taking over three floors that Citigroup is giving up, while TikTok parent ByteDance is leasing three levels at One Raffles Quay. Alibaba, the parent company of the South China Morning Post, bought a 50 per cent stake in a Singapore office tower in a deal valuing the property at S$1.7 billion (US$1.3 billion).