Office Take Up Rate In Singapore Increases Significantly
The office take-up rate in Singapore has risen and sources reveal that the changes are quite noticeable if a yearly comparison is made. The trends have reversed since there was a declining trend during the start of 2015 and 2016 but the Grade A CBD office space net absorption rate in Singapore during the first quarter of 2018 has increased and the results are far better than 2017.
The office take up rate in 2017 was between 2 to 3% but it now stands at 6%, which is a record in itself. The numbers are visible and this only shows that businesses are renting more office space in Singapore. This doesn’t come as a surprise as along with the take-up rate, coworking spaces have also risen greatly in Singapore.
Increasing by a total of 6.8% during the first quarter, the demand in the office take up growth increased in Singapore as occupiers from different fields such as technology, coworking operators and e-commerce moved into new office buildings in the CBD. These numbers show that a greater number of businesses were choosing these spaces and wanted more in their hands as far as offices were concerned.
The rise in the office take-up rate, according to JLL Singapore, was because the occupiers are readily moving in premises in buildings that have been recently completed including the Marina One, the Guoco Tower, and the UIC Building.
The fact that the economy had brighter conditions and that there has been a pick up in the leasing activity has sort of lifted the market and business confidence in Singapore. Also, this behavior has encouraged the take-up and pushed it up as well.
Moreover, the co-working operators have also capitalized on the presence of the space between competitive rents and rates to expand their presence and grab a good hold of the market. Some of the examples, in this case, include JustCo’s new center in Marina One and The Great Room taking up new space in Centennial Tower.
Tay also noted that shared workplace makes for 2.8% of the total occupied office space in Singapore, which makes it the 9th highest in the overall Asia Pacific market.
Shared office spaces have many benefits to offer, for they are cost-effective as compared to the traditional office spaces.
Tay, while commenting on the situation further, said, “Our initial estimations show that the workstations that are there in a typical flexible space in Singapore might be 50% cheaper as compared to the workstation in an office that is traditionally leased. However, coworking spaces are denser than the usual office spaces”.
“When we take into account the density, workstation in traditional office spaces is just 5% more costly than one in a flexible office space”.
On the other hand, the flexible office spaces have increased in Singapore and the office take-up rate has followed suit. This shows that people are quite interested in working from such spaces rather than going to bigger spaces or leasing out full offices, as they are cheaper and more affordable that way.