Bookmark & Share
Reversing the declining trend seen in 2015 and 2016, Singapore Grade A CBD office net absorption for the first quarter of 2018 surpassed the 2017 record at 6.0 percent, reported Singapore Business Review citing JLL.
Office net take-up rate in 2017 stood at between 2.0 and 3.0 percent.
Increasing by 6.8 percent in Q1, demand in Singapore led office take-up growth in Southeast Asia as occupiers from e-commerce, technology and flexible space operators moved into new supply.
JLL Singapore research head Tay Huey Ying noted that much of the net absorption was “fuelled by occupiers moving into their premises in recently completed buildings such as Guoco Tower, Marina One and UIC Building”.
“This was, in turn, underpinned by the pick-up in leasing activity on the back of the brighter economic conditions that lifted market sentiment and business confidence and encouraged take-up.”
While occupier demand was broad-based, technology and co-working operators have been especially active in looking for space, said Tay.
“Co-working operators capitalised on the availability of space amidst competitive rents to expand their footprint to grab market share. Examples include JustCo’s space in Marina One, Ucommune’s second co-working office in Suntec City and The Great Room’s space in Centennial Tower.”
In fact, flexible workspace accounts for 2.8 percent of occupied office space in the city-state, making it the ninth highest in major Asia Pacific markets.
Tay noted that flexible space in Singapore seems to be more cost-effective compared to traditional office space.
“Our initial estimates show that a workstation in a typical flexible space in Singapore could be up to 50 percent cheaper than a workstation in a traditionally leased office. But co-working space is often much denser than traditional office space.”
As such, when adjusted for “density and like-for-like costs, the cost differentials decrease substantially or disappear altogether”, said Tay.
“In Singapore, when density is taken into account, traditional leases cost only about five percent more than flexible space leases.”
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
Related Articles:
Thakral to acquire office unit at The Riverwalk