3 Trends That Will Shape Singapore’s Commercial Property Market
SINGAPORE – In the city-state’s commercial property market, 3 macro-level trends are expected to emerge due to the COVID-19 pandemic and the greater use of technology in doing one’s job, according to a commentary published by The Business Times on Tuesday morning (22 December, SGT).
“First, de-densification will drive firms to downside their current office space in the Central Business District (CBD) to avoid having workforce concentrated in one location. Some office space will be converted to other uses creating more diversified and mix-uses in the CBD,” wrote Professor Sing Tien Foo and Research Assistant Lau Li Min.
Sing is the Director at the Institute of Real Estate and Urban Studies, as well as Head of the Department of Real Estate at the National University of Singapore (NUS), while Lau is a Research Assistant at the institute.
Second, they said the decentralisation of offices to fringe locations near the residences of their workers is expected to reduce commuting time. Consequently, employees will have more face-to-face interactions with customers. As for service providers and collaborators, businesses can continue working with them via online platforms.
Third, remote working is expected to boost demand for data centres, which provides cloud-based data storage, as well as a way for companies to manage their operations remotely and communicate securely.
“These three major trends will put downward pressure on the new supply of office space, which may trigger [a] rethinking of the future of the CBD,” said the 2 academicians.
Meanwhile, the duo said that coworking space operators can survive the severe impact of the health crisis by creating a community. They could establish social networks to add value for their clients in a post-pandemic world.
“Coworking operators are not just providers of flexible working space, they also create a community that facilitates co-localisation of individuals, start-ups and executives from multinational companies, who work independently in the shared office space.”
“It is an essential for coworking operators to organise social events to help their members to connect, collaborate and get inspired by other members in the community,” they noted.
Based on data from Colliers International, the coworking industry was responsible for 30 percent of demand for office space in Singapore as of Q3 2019. It also increased the demand for leasable office space by 3-fold since 2015 to 3.7 million sq ft.
At present, WeWork is the biggest provider of flexible workspace here with roughly 850,000 sq ft of net coworking spaces. Together with JustGroup and IWG, these 3 jointly hold 51 percent of the net lettable coworking space in Singapore, they added.
