Office Demand Would Not Be Halved

Office Demand Would Not Be Halved Even If Only 50% Of Staff Return

SINGAPORE – Local developer GuocoLand believes that demand for office space would not be halved even if only 50 percent of employees return to work in such commercial properties, reported The Edge on Friday morning (29 October, SGT).

This is because staff would likely report to their workplace 2 or 3 days per week. Consequently, the office would then serve a different function, namely for meetings, group discussions, and brainstorming sessions.

“This is unlike in the past where you come into the office and sit down to work. You now do that at home, and come to the office to interact with colleagues,” said GuocoLand’s General Manager for residential, Dora Chng.

Given the prevalence of hybrid work, Yvonne Siew, Head of real estate advisory and investment at Bank of Singapore, pointed out that office spaces are becoming “more residential”. “People are more concerned about how the office looks, sanitisation and wellness issues.”

Siew also reiterated that ongoing flight to quality, with rents of newer Premium Grade office buildings holding steady, particularly those situated in the city area, as well as those near amenities and transport hubs.

Notably, Bank of Singapore is a wholly-owned unit of OCBC Bank. Siew leads the financial firm’s private banking arm and her customers include high net-worth individuals (HNWI), institutional investors, family offices, and multi-family offices.

She also shared that the changes in working arrangements have altered investment behaviour, with property investors targeting assets like data centres, logistics, and e-commerce distribution, as well as prime residential or multi-family housing.

Nonetheless, there’s still interest in prime Grade A office space but the priority are assets with a long weighted average lease expiry (WALE) and those with built-in rental escalations, added Siew.

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