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6
dTZ | In Situ
Where Are TMT COMpAnIeS
heAdquArTered GlObAlly
And WhAT Are The drIverS
behInd TheSe lOCATIOn
ChOICeS?
kW:
our analysis of the 100 largest
global TmT companies shows that over
half of major technology and media
players are headquartered in the uS. The
telecommunications sector displays a
more globally diverse distribution with
a significant share of headquarters in
‘other locations’, mainly South America,
canada and the middle east (Figure 2 on
page 4). In terms of individual markets,
clearly Silicon Valley is a major hub for
technology and innovation, driven by the
presence of major universities, such as
Stanford, Berkley, and the sheer number
of technology corporations that are
located in the valley; but also the fact that
a third of the world’s venture capital is
sourced there. new York is also a key hub,
in media primarily but also technology,
following big efforts by mayor Bloomberg
to reduce new York’s dependence upon
the finance sector.
In London, there is a very strong media
and technology sector in the West end.
In Asia, hong Kong is home to many
telecommunications companies, serving
as a gateway to the chinese market,
whilst Singapore is attracting the likes
of LinkedIn and Facebook as a regional
headquarter. Finally, Japan is home to
some of the largest TmT companies
globally, particularly telecommunications.
rC:
The balance of power in the TmT
sector continues to shift from West to
east driven by cost, access to talent,
demographics and also economics. From
an engineering perspective (software
engineering) which is where research and
development takes places in technology
companies, we are seeing the emergence
of India - not just Bengaluru, but also
other cities such as Pune, hyderabad and
chennai. Likewise, in china, we are seeing
activity in Beijing and Shanghai, but also
beyond, in tier II cities. TmT companies
have huge potential in emerging markets.
In 2020, the e7 will account for a greater
share of global GdP than the G7. With
that in mind, one can see how significant
these are both as markets and also
opportunities to source talent.
Are There Any InTereSTInG
reAl eSTATe TrendS FOr TMT
COMpAnIeS ACTIve TOdAy?
kW:
An interesting and fairly recent
trend is a rise in TmT activity in central
business district (cBd) areas. Technology
and media companies are increasingly
choosing to locate in cBd centres as
opposed to traditional, out-of-town
technology business parks as was the
case 10 years ago. This trend is most
evident in dublin, London, new York, San
Francisco and Singapore. In London, the
city core has accounted for nearly a third
of TmT take-up over the last two years.
one of the main drivers of this trend has
been the proximity to young talent who
prefer urban living. At the same time,
however, choice of space can be highly
limited in cBd areas and landlords are
finding it more and more difficult to
accommodate TmT players who often
require highly customised and efficient
space to support rapid expansion.
rC:
In the San Francisco Bay Area,
start-ups are now headquartering and
establishing satellite offices in San
Francisco city as opposed to the Silicon
Valley. companies flock to the city in
order to attract a young employee base
and capitalise on the city’s new payroll tax
exemption for new employees. Generally
the factors that are contributing to this
trend are the attraction and retention of
talent (namely generation Y talent), the
fact that cost differential between city
centre and out of town is less marked
than was the case previously, and finally
access to city centre amenities which
is sought after by both companies and
employees. This trend is so far evident
in only certain parts of the TmT sector
so it will be interesting to see whether it
spreads to more traditional technology
companies, such as oracle and Intel,
who are typically located in out-of-town
locations.
WhAT WOuld yOu SAy Were
The key ChAllenGeS FACInG
TMT COMpAnIeS In TOdAy’S
MArkeT?
kW:
The TmT sector is an ever-changing
industry characterised by high levels
of competition and innovation. This
competition is forcing TmT players to
stay well ahead of the game and to
successfully adapt to new markets,
sometimes with entirely different
considerations. understanding both the
opportunities and challenges of target
markets will be key to ensuring success.
rC:
From my experience, one of the
greatest challenges for occupiers
operating in the TmT sector is finding
flexible space. many companies,
particularly those witnessing hyper
growth, are interested in buildings in
which they can expand over the course of
their lease. A second challenge is finding
a landlord who understands their physical
needs and who is interested in building
a long-term relationship with them.
From the landlord’s point of view, the
biggest challenge will be to put together
large estates for TmT companies to
accommodate both space requirements
and growth. Landlords need to work
closely with occupiers to understand what
they are looking for in a physical space
that provides flexibility for their needs,
but bearing in mind that their needs are
continuously changing.
Rob cooksoN
Head of Global corporate
services, Americas
+1 650 353 3055
kARiNe WoodfoRd
Head of occupier Research
+44 (0)20 3296 2306
It should be noted that the TmT sector is huge and growing,
and although we are looking at trends across the whole
of this sector, there are still notable differences between
each of the Technology, media and Telecommunications
sectors that are not so easily generalised.
