Tech Cities: Five key trends for occupiers
Changing market dynamics and their impact on the office sector pre-date the COVID pandemic, but the recent tech boom has reconfigured many of those dynamics once again. Tech occupier requirements are shifting, and despite the global economic slowdown, tech firms increased both headcounts and space take-up in the past five years. Recent layoffs belie actual employment numbers.
In Tech Cities 2023: Five key trends for occupiers, Savills reviews the trends set to have a major influence on tech occupiers in the coming years, chief among them rising headcounts and the ongoing demand for tech professionals, across the globe and across industries, as organisations continue digital transformations. In a related pattern, remote tech workers demand lifestyle hubs thanks to the flexibility tech organisations offered workers during the pandemic — flexibility many are not giving up. A strong tech city must now be a place that emphasises health, wellness and connectivity among other features.
Addressing remote worker demand is crucial because hybrid working models are likely here to stay. What was a temporary solution to a health crisis has become the de-facto standard, with the office playing a reimagined role for tech occupiers. Even in APAC, where presenteeism is more ingrained, office utilisation is at just 77%.
Hybrid working, lifestyle considerations and rising headcounts all impact office costs, another trend tech occupiers will need to wrestle with in the immediate future. A challenging economic environment combined with hybrid working models means occupiers will be rethinking their space needs. Finally, all these factors contribute to the overriding trend for occupiers to bear in mind: that working in premium tech cities comes at a cost. Both office and residential rents in tech cities like New York are among the highest in the world, and they have remained stable, and emerging centres offer an alternative. Balancing utilisation, consolidation and housing costs will remain a focus going forward.
To read about Tech Cities 2023: Five key trends for occupiers, head to Savills Impacts
