Bucking a trend of declining corporate confidence, the Asia-Pacific offshoring market is projected to surge, according to a new report by Knight Frank. The report, titled “Asia-Pacific Horizon: Harnessing the Potential of Offshoring,” forecasts that the market will more than double in size to a staggering USD 185.1 billion by 2032. This growth is expected to drive a significant demand for office space, with an additional 4.7 to 5 million square meters needed annually for the next three years.
Global Offshoring Market Shows Steady Growth
The Knight Frank report paints a bright picture for the offshoring industry worldwide. The global market is expected to reach USD 544.8 billion by 2032, reflecting a healthy compound annual growth rate (CAGR) of 8.5%. While North America remains the dominant player, Asia-Pacific is poised for the fastest growth globally, boasting a CAGR of 10.2%.
Asia-Pacific Capitalizes on Trends
Tim Armstrong, Global Head of Occupier Strategy and Solutions at Knight Frank, attributes the region’s success to its ability to capitalize on global economic trends. “The Asia-Pacific offshoring industry is witnessing unprecedented momentum,” says Armstrong. “The region has transformed into a thriving hub for offshoring, with countries like India, Philippines, Malaysia, and Vietnam becoming leading destinations.”
Cost Savings and Talent Pool Attract Companies
The report highlights the key advantages that Asia-Pacific offers to companies seeking offshoring solutions. “Occupiers” can expect significantly lower operating costs in the region, with savings of nearly 70% compared to the US. Across major cities, companies can save an average of USD 70.86 per square foot of office space, translating to a substantial 54% annual reduction in occupancy costs.
Beyond cost savings, Asia-Pacific boasts a highly educated, versatile, and multilingual talent pool. This workforce is well-equipped to deliver high-quality customer service, giving the region a competitive edge.
Shifting Priorities in Office Space
Armstrong also points to a significant shift in the global office sector. Companies are increasingly prioritizing sustainable buildings with energy-efficient features, amenity-rich offices that offer desirable features beyond just desks, and flexible workspaces that can adapt to changing needs and hybrid work models.
Asia-Pacific: A Prime Location for Offshoring
While confidence in the office sector is declining, particularly in the US, companies are looking towards Asia-Pacific for solutions. The region offers high-quality premium office space in city centers, with many buildings adhering to ESG (environmental, social, and governance) standards. This aligns perfectly with companies’ goals of achieving net-zero emissions by 2030.
Conclusion
The Asia-Pacific offshoring market stands as a beacon of growth in a challenging business environment. Lower costs, a focus on sustainability, and a skilled workforce make Asia-Pacific a prime location for companies looking to expand their offshoring operations.
