Singapore Shadow Office Space May More Than Triple Next Year
SINGAPORE – Real estate consultants foresee that shadow office space in the city-state could surge by over three-fold in 2023, reported The Business Times on Tuesday morning (27 December, SGT).
Notably, shadow office space refers to premises an existing office occupant would like to relinquish by seeking a replacement tenant for the said office space.
Savills Singapore’s Executive Director of Research and Consultancy Alan Cheong revealed that the emergence of shadow office space has been gathering pace since the beginning of October 2022.
Aside from that, CBRE expects the overall amount of shadow office space in Singapore would increase significantly by early-2023 to about 700,000 sq ft, of which about 64 percent is estimated to be surrendered by the tech industry. This is a far cry from the 200,000 sq ft of shadow office space recorded during the 3rd quarter of this year.
“It is reasonable to expect more shadow space to enter the market in 2023,” noted June Chua, Executive Director & Head of tenant representation at Colliers.
She explained that this is because many firms are looking at adapting their office footprint to the new way of working, while some companies and industries are considering right-sizing their workspace to better manage costs. Others are also future-proofing their premises from an environmental, social, and governance (ESG) perspective.
Additionally, market watchers shared that some office occupants are facing difficulties persuading their staff to work in the office more frequently.
In 2022, CBRE’s Research Head for Southeast Asia Tricia Song disclosed that leasing activity was driven not just by tech companies but also by law firms, coworking space operators, and non-bank financial companies.
For 2023, Jones Lang LaSalle’s (JLL) Research Head Tay Huey Ying forecasted that office demand in Singapore would be propelled by financial service providers along with professional and business services sectors, whereas demand from tech firms is expected to moderate.