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Rental demand for co-working space in Singapore is anticipated to reach 550,000 sq ft this year thanks to the growing popularity of this trend among firms, the city-state’s flourishing start-up scene, as well as the government’s strong support for innovation and business, reported Singapore Business Review.
“The demand for co-working or flexible workspace – led initially by start-ups, freelancers and tech firms – has grown substantially since 2015 as large businesses embrace the sharing economy,” said Duncan White, head of office services at Colliers International.
Currently, Singapore houses 110 to 120 co-working space operators, with about 75 percent located in the central business district. They also account for approximately 944,000 sq ft or 3.9 percent of the combined net lettable area of premium and Grade-A office space here, translating to a 36 percent increase since 2016.
Another factor that is driving the appetite for such premises is the rising cost of traditional office space, with Grade A office rents edging up 1.3 percent quarter-on-quarter to $9.06 psf in Q1, as these alternative office spaces are typically more affordable.
“Singapore’s high rents will continue to stoke the adoption of co-working strategies due to sustained cost advantages,” noted Sigrid Zialcita, Cushman and Wakefield’s managing director for research for Asia Pacific.
To avoid being left behind, she noted that major property developers are launching their own co-working spaces. For instance, there’s Coqoons by Mapletree Investments, CapitaLand’s Flexi Suites and thebridge by Ascendas-Singbridge.
Furthermore, operators are striving to differentiate their design, concepts and the sectors they serve in a bid to secure more market share.
For example, Treehaus has made a name for itself as the first shared office here with childcare facilities, while Paperwork at National Design Centre features Virtual Reality equipment that lets tenants preview their design projects, said Ong Choon Fah, chief executive and research head at Edmund Tie & Co.
She shared that the co-working trend in Singapore shows no sign of easing, with such premises accounting for 15 percent of new demand for premium office premises in 2017. In addition, operators are expected to launch 11 new facilities this year or in 2019.
“We can expect to see continued evolution of differentiated services and niches offered within the physical space, the membership community and also the tech platforms offered by the operators,” said White.
“What started out as a disruptor and an alternative to traditional offices is now a fundamental part of the commercial real estate market,” he added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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