Investing In Quality Office Space Greater Priority Than Expanding Overall Property Footprint
SINGAPORE – A study by Jones Lang LaSalle (JLL) showed that more corporate property professionals prefer quality over quantity when it comes to office space, according to an article written by the property consultancy that was published on The Business Times on Thursday morning (6 October, SGT).
According to JLL’s Future of Work Survey 2022, 88 percent of interviewed corporate property professionals in Singapore agree that investing in quality office space is more paramount than expanding their overall office footprint. This rate surpasses the 80 percent global average and the 82 percent average for the Asia Pacific (APAC) region.
JLL explained that post-pandemic, companies are now hard-pressed to make sure their workspaces are optimised to encourage staff to spend time in the office. This has resulted in office tenants gravitating towards better quality and newer office projects.
Consequently, the average office vacancy level at Singapore’s Marina Bay office submarket, which houses mostly newer, good quality and green office developments, had fallen to 3.6 percent during the 2nd quarter of this year amidst the ongoing flight-to-quality trend.
Office tenants that are poised to relocate to the Marina Bay area include KPMG, which agreed to occupy 125,000 sq ft of office space at Asia Square Tower 2. The company will be transferring from Hong Leong Building, which had been its home for over 40 years. Also, Chinese online fashion retailer Shein is said to have committed to lease 21,000 sq ft at Marina Bay Financial Centre Tower 3.
Moreover, newly completed office building CapitaSpring managed to attain a 93 percent leasing commitment rate when it received its Temporary Occupation Permit (TOP) at the end of 2021, overcoming the hurdles of marketing during the pandemic.
Similarly, the pre-commitment rates at Guoco Midtown and IOI Central Boulevard Towers are climbing steadily. These developments are expected to be ready by 2022 and 2023 respectively.
The above shows that new and good quality office buildings are sought-after, noted JLL’s Andrew Tangye and Tay Huey Ying. The former is the Head of office leasing and advisory at JLL Singapore, while the latter is its Research Head.
“It is, therefore, pertinent that landlords ensure that the quality of their office assets are aligned with corporates’ expectations, and these include large column-free spaces that are integrated with green features and served by state-of-the-art building services and management systems,” they urged.
To provide more proof that new and good quality office spaces are now the fad, in JLL’s Workforce Preferences Barometer 2022, 70 percent of Singapore employees said their most significant expectations for their workplaces are offices that foster a healthy lifestyle and those that look after their safety and wellbeing.