Occupancy At Singapore Coworking Spaces

Occupancy At Singapore Coworking Spaces Rebound In Q3

SINGAPORE – A recent report from CBRE revealed that the average occupancy rates at coworking centres here have recovered to 80 to 90 percent as of the 3rd quarter compared to just 50 to 60 percent during the course of the COVID-19 pandemic, reported The Straits Times on Monday evening (5 December, SGT).

The better market situation, which has given flex office space operators more confidence and encouraged them to scout for new outlets, follows the reopening of Singapore’s borders and resumption of back-to-office work.

In fact, Singapore coworking space operators leased 150,000 sq ft of office space during the first three quarters of the year, surpassing the 120,000 sq ft recorded for the whole of 2021.

Moreover, the rising demand for flexible office space led to increasing sizes of coworking outlets. In 2013, the average size of coworking centres stood at 9,590 sq ft, but it has surged by more than two-fold to 23,058 sq ft during the 3rd quarter. This comes as outlets housed bigger areas for hotdesking and a higher proportion of private suites, as well as more community-building facilities that let members network and socialise.

“Recent staffing announcements in the tech sector, as well as companies generally looking to optimise their workplace in a hybrid working era means that the flex sector will benefit while companies plan for the future,” said CBRE’s Co-head of office services David McKellar.

“We continue to see an influx of new-to-market firms and considering the speed to market, capex neutrality and flexibility; flex spaces will serve as an attractive option,” he added.

In the property consultancy’s latest 2022 Office Occupier Survey, CBRE’s Research Head for the ASEAN region Tricia Song stated that “73 percent of respondents in Singapore utilised flex space, as compared to 53 percent in Asia Pacific.

“By 2024, almost all companies will have flexible work arrangements. 17 percent of the respondents stated that flex space will account for 26 to 50 percent of their portfolio by 2024, up from 3 percent currently,” she added.

One thriving coworking space operating in Singapore is Trehaus, which allows workers to be close to their children as the company also offers pre-school and childcare service, in addition to child-minding support.

Founded in 2016, the operator now has 47 staff and its 15,000 sq ft coworking centre in Funan accommodates around a dozen firms and about 20 families.

“We’ve seen an increase in people interested in using our services due to the recent push for flexible working and people re-examining their options for work. We also capture the niche crowd of parents who want to work near their children,” said Trehaus Founder Elizabeth Wu.

In spite of improved demand, flex office space operators face rising expenses due to inflation, with power costs and higher property rentals hitting their profit margins.

For instance, Wu expects to hike their fees by 10 percent, as the cost of goods, repairs, and maintenance have increased by 10 percent to 20 percent, while its power bill has climbed by 25 percent.

“We’ve tried not to raise our prices to be in solidarity with our clients during the pandemic, but costs are going to be more of a problem next year with the goods and services tax (GST) hike,” she added.

Notably, Singapore’s GST rate will be hiked from 7 percent to 8 percent by January 2023 and to 9 percent starting from 2024.

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