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Tech districts growing across Greater Kuala Lumpur

12 October 2017
11 October 2017, Kuala Lumpur – Knight Frank, the independent global property consultancy, launches the fourth edition of Global Cities: The 2018 Report. The report looks into the continuous trends in real estate across 40 Global Cities, equipping occupiers and investors with insights for future real estate decisions. The year’s report analyses the cost of office space in the tech and creative districts of the world’s 29 leading cities.
 
Ranking highlights:
·         Shoreditch in London is identified as the world’s most expensive tech district, with intense demand for office space pushing rents as high as US$90.75 per sq ft – which are almost as high as prime rents in London’s main financial district; and more than doubled that of Singapore’s One-North (US$41.45).
 
·         Bangkok’s CBD including Rama 1, Sathorn and Sukhumvit Soi 21 (US$74.25) and Zhongguancun in Beijing (US$55.05) are the only two tech districts in Asia Pacific on the top 10 list.
 
·         Shoreditch is followed by Mid-Market in San Francisco, where rents are US$77 per sq ft, and Silicon Docks in Dublin (US$76.30) which has become the European base for many tech corporates including Twitter and Google.
 
·         Despite boasting some of the most expensive office buildings in the world, Hong Kong, Shanghai and Singapore all provide affordable office space in their emerging tech districts.
o    In Cyberport, the heart of Hong Kong’s tech sector, office rents are US$36.90.
o    Zhangjiang Hi-Tech Park in Shanghai and One-North in Singapore offer rents at US$27.50 per sq ft and US$41.45 per sq ft respectively.
 
·         Cyberjaya (US$11.55)in Kuala Lumpur – the city’s pioneer global tech hub in 1997 – offers some of the most competitive rents compared to the rest of the Global Cities.
 
Teh Young Khean, Executive Director of Corporate Services, Knight Frank Malaysia, highlights, “With increasing demand for premier business location, the country has seen a growth in new Cybercities and Cybercentres across Greater Kuala Lumpur, including KL Sentral, Mid Valley City and Bangsar South which are growing in popularity with tech companies.”
 
Nicholas Holt, Asia Pacific Head of Research, Knight Frank, says, While the new economy is driving demand in many of Asia Pacific’s office markets, rental costs in specific technology cluster areas vary significantly. De-centralisation has provided opportunities for tech companies outside the major tertiary office areas. This is reflected in Shanghai where opportunities can be found outside the CBD in areas such as Zhangjiang Hi-Tech Park, as compared to Bangkok where typically tech companies would be clustered in the CBD.”
James Roberts, Chief Economist at Knight Frank, says, “The fact that rents in Shoreditch exceed those in Brooklyn and Mid-Market San Francisco underlines London as a world-leader in tech.
 
“However, while there has been much debate on how Brexit will affect London’s status in financial services, the impact on the burgeoning tech sector has been overlooked. To maintain its position London will need to attract and retain the world’s best talent, and that means works visas.
 
“Support for London’s thriving tech industry should be higher on the government’s list of priorities.”
 
Datuk Zainal Amanshah, Chief Executive officer at InvestKL, says, “MNCs are starting to immerse in the digital economy in a big way and Kuala Lumpur’s dynamic eco-system is digitally ready in terms of talent, choice of business hubs, key stakeholders support and cost. The city continues to attract FDIs to join the long list of MNCs that have called Kuala Lumpur their digital and regional hubs.”
 
 
Office rents in Tech Districts
Ranking 
City
Tech District
Prime Rent
(US$ per sq ft per annum)
1
London
Shoreditch
90.75
2
San Francisco
Mid-Market
77.00
3
Dublin
Docklands
76.30
4
Bangkok
CBD: Rama 1, Sathorn, Sukhumvit Soi 21
74.25
5
Paris
1st, 2nd and 9th Districts (Cité Financière )
74.00
6
Boston
Seaport District
72.00
7
Los Angeles
Playa Vista
62.00
8
New York
Brooklyn
56.05
9
Beijing
Zhongguancun
55.05
10
Washington DC
NoMa (North of Massachusetts Avenue)
51.25
11
Austin
The Domain
44.50
12
Seattle
South Lake Union
44.00
13
Dubai
Dubai Media City
43.55
14
Singapore
One-North
41.45
15
Berlin
Potzdammer Platz
40.70
16
Toronto
King & Spadina
39.90
17
Hong Kong
Cyberport, Pokfulam
36.90
18
Miami
Coconut Grove
35.00
19
Chicago
Fulton Market District
35.00
20
Amsterdam
City Centre
34.45
21
Sydney
Pyrmont
33.80
22
Melbourne
Richmond
32.05
23
Shanghai
Zhangjiang Hi-Tech Park
27.50
24
Mexico City
Santa Fe
27.30
25
Delhi
Gurgaon (Cyber City)
20.40
26
Seoul
Guro-gu (Guro Digitial Complex) & Geumcheon-gu (Gasan Digital Complex)
14.65
27
Madrid
Julian Camarillo area
13.65
28
Kuala Lumpur
Cyberjaya Office Market
11.55
29
Bengaluru
Whitefield
9.65
END
 
 
Follow @KnightFrank #KFGlobalCities www.facebook.com/KnightFrankLLP
 
For further information, please contact:
Nicholas Holt, Asia-Pacific Head of Research
nicholas.holt@asia.knightfrank.com+86 10 6113 8030 @nholtKF
Rachel Loke, Asia-Pacific Head of Marketing, Communications & Digital
rachel.loke@asia.knightfrank.com+65 6429 3587 @knightfrank
Ms Seline Soo, Marketing & Communications Manager, Knight Frank Malaysia
seline.soo@my.knightfrank.com +603 2289 9669 @KnightFrank_my
 
 
Notes to Editors
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 14,000 people operating from 413 offices across 60 countries. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit knightfrank.com.
 
Knight Frank has a strong presence in Malaysia with its headquarters in Kuala Lumpur as well as branches in Penang, Johor and Kota Kinabalu. The company offers high-quality professional advice and solutions across a comprehensive portfolio of property services and is registered with the Board of Valuers, Appraisers and Estate Agents. The Company is licensed to undertake property, valuations / consultancy, estate agency and property management and is also on the panel of all leading banks and financial institutions. For further information about the Company, please visit KnightFrank.com.my