Singapore To See Highest Growth In Flex Office Demand In Asia Pacific
SINGAPORE – In a research, The Instant Group forecasted that demand for coworking spaces in the city-state this year would rise by 41 percent – the highest growth in the Asia Pacific (APAC) region, reported the South China Morning Post (SCMP) on Monday afternoon (11 September, SGT).
“Interest in flexible workspaces in Singapore has grown as a direct result of COVID-19,” commented a representative from The Instant Group, a multinational operator of flexible office spaces.
“More and more companies are now adopting hybrid workplace solutions to reduce their footprint and associated costs, as well as attract and retain staff,” added the spokeswoman.
Across Asia Pacific, demand for coworking space increased by 16 percent in H1 2023 compared to the same period during the preceding year. By the end of 2023, demand for flex office space is projected to be merely 2 percent below pre-pandemic levels, according to The Instant Group’s research.
The study also revealed that the desk prices of Singapore coworking spaces average at US$488 per month.
In comparison, that in rival commercial hub Hong Kong has reached US$609 per month, the most expensive in the APAC region. Also, prices of flex office spaces in the Chinese territory are expected to increase by around 20 percent in 2023.
Meanwhile, prices of coworking spaces in the other Asia Pacific cities ranged between US$339 and US$545. After Hong Kong, Shanghai has the second priciest flexible office at US$545 per month, followed by Tokyo at US$515 per month.
“Overall across the Asia Pacific, occupier confidence is returning to the flex market, with markers such as demand and the number of transactions all continuing to grow,” noted Sean Lynch, Managing Director for Asia Pacific at The Instant Group.
Customers are taking up significantly larger chunks of coworking spaces than they did during the pre-COVID period. Asia Pacific’s average transaction in H1 2023 rose to 9.6 desks, a jump of 113 percent from the 4.5 average in H1 2019.
Deals involving 25 or more desks now account for 42 percent of the overall transaction in 2023, up from 24 percent in 2019. While the percentage of deals involving one to two desks have plunged from 15 percent to 5 percent over the same period, average contract durations have edged up by 5 percent from 10.2 months in H2 2022 to 10.7 months during the first half of 2023.
“Companies are taking on flex as an agile workspace solution. However, many are still reluctant to commit for long periods of time due to ongoing economic uncertainties,” Lynch added.