H&Q Asia Pacific said on Wednesday it has bought a real estate complex in San Francisco for $90 million in cash to create a disruptive technology hub for Asian companies.
The Palo Alto private equity firm bought the 260,183 square foot grade-A commercial real estate complex from Hudson Pacific Properties and will invest a further $10 million to hire staff and set up legal, financial and accounting advisory services to help its tenants prosper.
“We want to inject the Silicon Valley secret sauce into these companies to make them innovative,” Ta-lin Hsu, chairman and founder of H&Q Asia Pacific told FinanceAsia in a phone interview from California.
As these companies flourish in the hub, H&Q Asia Pacific will have the right-of-first-refusal to invest in them.
H&Q Asia Pacific is betting on Silicon Valley’s resurgence in attracting the most entrepreneurial Asian companies.
Hsu, who turns 72 this year, has made a career out of facilitating the cross-border flow of ideas and investment between the US and Asia. Since he founded H&Q Asia Pacific 30 years ago next year, the tide has changed direction he says.
When US companies were relocating supply chains en masse to lower-cost locations in Asia during the eighties and nineties H&Q Asia Pacific helped develop tech parks across Asia, including Taiwan’s Hsinchu Park and a large commercial complex in the Shenzhen Science Park.
However with the rise in labour costs across Asia, China’s 115 high tech centres, which were successful in manufacturing, “now are all struggling for something innovative to do”.
At the same time the rise of US iconic brands such as Apple, Google and Facebook has proven Silicon Valley’s global dominance as an innovation hub, Hsu said.
“The flow of capital is reversing,” Hsu told FinanceAsia after riding back from a dinner in an Uber taxi.
“Once more Silicon Valley is proven to be unique and dominant in innovation,” said Hsu who has lived through Silicon Valley’s rise. He first attended the University of California, Berkeley in 1966, two years later Intel was founded.
The technology zone, two miles away from the San Francisco Internaional Airport, is already 85% occupied with tenants such as Virgin Atlantic and Hsu said H&Q Asia Pacific has already received “many many requests” from Asian tech companies to set up research & development as well as marketing beachheads in the tech hub.
Hudson Pacific acquired the 13-acre waterfront site comprising two office blocks earlier this year from Blackstone.
Eastdil Secured represented Hudson Pacific and Alain Pinel Realtors represented H&Q Asia Pacific in the transaction.