NEW DELHI: The fourth Corporate Real Estate Impact Survey (CREIS 4) survey by real estate consultancy Jones Lang LaSalle says that there has there has been a marked increase in offshoring activity over the past three years.

Half the respondents to CREIS 4 indicated that they currently offshore activities to lower cost locations within Asia Pacific.

This is broadly in line with the findings of our survey of US-based firms, which found that 58% had already offshored some office activities.

According to a release, companies surveyed were planning to increase the level of offshoring for back office processing, call centres, IT/software and R&D over the next three years.

In terms of preferred locations, India remains the prime target for Business Process Outsourcing and call centre activities while China continues to emerge as a major destination for R&D and software centres.

The emergence of tier-three cities in India like Ahmedabad, Chandigarh, Kolkata, Indore and Nagpur and new locations in China such as Dalian, Wuhan, Xian and Chongqing will keep these two countries at the forefront of the offshoring wave.

However, new locations across APAC are expected to emerge in the longer term, possibly in Sri Lanka, Pakistan, Vietnam and islands outside of Luzon in the Philippines.

The survey also states that demand for space increased in most markets over the past 12 months, with the strongest demand focused on the major Chinese cities of Shanghai and Beijing. Indian cities (including Bangalore, Mumbai, Delhi and Hyderabad) also remain in favour. Among the more established markets, Seoul, Sydney and Bangkok recorded the strongest demand, reflecting an increase in white collar employment generated by strong economic growth in these markets.

Looking ahead, the strongest demand for office space over the next 12 months will remain focused on China, followed by cities in India.

This is driven primarily by local economic expansion and these markets' continued appeal as offshoring destinations. China has also emerged as the favoured location for future demand of industrial real estate. Of the respondents looking to increase industrial space, more than half (58%) chose cities in China. This reflects a combination of the growth of offshoring (with China becoming more popular for R&D activities) as well as the continued interest in manufacturing to service the growing domestic market within China.