CBRE’s new office in Paya Lebar Quarter Tower 3 spans 32,000 sq ft on one floor; the company began occupying the space last month (Pictures: Samuel Isaac Chua/EdgeProp Singapore)
On June 17, CBRE unveiled its new Singapore headquarters at one of the three Grade-A office blocks at Paya Lebar Quarter (PLQ). Spanning 32,000 sq ft at PLQ Tower 3, the office houses some 480 CBRE employees. This new office is CBRE’s response to the government’s push for more decentralised commercial hubs and to bring jobs closer to home.
“A successful workplace strategy should take into consideration the physical environment, tech infrastructure and user needs and experience in totality,” says Moray Armstrong, managing director of CBRE Singapore.
The new headquarters is a showcase of what CBRE envisions to be the workplace of the future. Only 18 people in the office have assigned seats and most of them are personal assistants. The rest of the employees use a hot-desking system.
The space is also designed with flexibility in mind. For instance, there is a multi-purpose area that can accommodate up to 300 people and be easily converted to an ad-hoc meeting location, cafeteria or workspace. “The function of this area has been deliberately blurred. While we have a café and staff pantry here, and half of the area is designed for eating, the rest of the space is set up for people to work,” says Peter Andrew, senior director of workplace strategies (Asia Pacific) at CBRE.
A multi-purpose space in CBRE’s new office can accommodate up to 300 people; with a cafe and staff pantry in the space, half of the area is designed for eating, while the rest of the space is set up for people to work
Meanwhile, CBRE has also rolled out a proprietary office app called Host for its own use as well as for its clients. Some features include wayfinding, scheduling meetings, booking meeting rooms, F&B services as well as access to concierge services.
Workplace strategy gaining traction
This is all in line with CBRE’s estimates that all offices will adopt at least one form of workplace strategy by 2030. “This will come in the form of smart offices or an agile workplace strategy – or very likely a combination of both,” states Desmond Sim, CBRE’s head of research, Southeast Asia, in the company’s 2030: An Office Space Odyssey report.
While technology firms were the first to adopt these strategies, Sim notes that companies in other sectors are also shifting away from traditional offices. For example, CBRE adopts a core-and-flex model whereby it maintains a satellite office at 6 Battery Road for its frontline staff even though its headquarters is in a decentralised location.
“Increasingly, firms from various services industries such as financial, advertising and business services have begun adopting workplace strategies. Even legal firms, who are known for their large private offices, are beginning to explore hot-desking,” he says.
CBRE’s neighbours in PLQ include companies such as SMRT, Great Eastern and NTUC Income. SMRT had initially signed up to occupy 97,000 sq ft spread over three floors but was unable to fill one of the floors. That space is now leased to pharmaceutical company Bayer in a deal brokered by CBRE.
Shift in leasing strategy
Additionally, Sim highlights that there are clear indications of landlords’ growing acceptance towards embracing flexible offices as part of their leasing strategy. As such, he expects landlords and developers to continue honing their capabilities in building and managing flexible office spaces.
“With their extensive portfolios and healthy financial status, their position and market share in this market are poised to expand significantly. It is likely that the flexible office market will be dominated by landlords and a small handful of large private operators,” says Sim.
This is in contrast to the past, when serviced office operators were the first movers in the flexible office space almost a decade ago. In 1Q2019, privately owned co-working operators accounted for almost 37% of market share compared to 44% of privately owned serviced office operators. CBRE defines private ownership to be when more than 50% of the company is still privately held.
“JustCo still forms a large proportion of the 37% of privately owned co-working operators, because the investment by Frasers Property and GIC is less than 50%,” says Sim.
The most notable trend is the growing market share attributable to operators that are significantly backed and owned by landlords or developers. “Through a series of shrewd and sizeable investments, this has enabled landlords to capture almost one-fifth of the market,” he says.
This includes CapitaLand’s investment in The Great Room, and separately, its investment in The Work Project, as well as City Development Ltd’s partnership with Distrii (see table below). These property giants are strengthening their position and growing their market share by rolling out larger flexible space offerings in their own developments.
“Their allocations of flexible offices in newly constructed buildings stand at 10-15%, which is significantly higher than the industry average that is slightly below 6%,” says Sim.
At the top is Australian-based developer Lendlease, which launched its proprietary co-working brand csuites in PLQ earlier this year, taking up 72,000 sq ft in PLQ Tower 3.
Next is Ascendas-Singbridge, which has 30,000 sq ft flexible space under its own brand thebridge in the Ascent building in the Singapore Science Park. It plans to expand the brand into its new ASB Tower, a redevelopment of the former CPF Building on Robinson Road.
Guocoland has also announced that its upcoming Guoco Midtown will set aside 15% of its 650,000 sq ft office space for flexible spaces.
“Office-building owners can no longer expect to have just a plain reception on the ground floor and expect to fully lease out the office space. They must be engaged landlords, allocating a few floors of flex-space and amenities in the building,” says Sim.
Andrew says that most traditional open-plan environments are not conducive. “They are a one-size-fits-nobody solution that does not encourage collaboration and are just noisy,” he says.
CBRE has incorporated these considerations at its office in PLQ and is seeing positive results, especially for its multipurpose area.
“We’ve gotten feedback that this arrangement has encouraged people to connect face to face and rather than converse over emails, since it’s easy to meet and strike up a conversation,” Andrew says. “A senior leader here told me that he hasn’t read his emails for three days, and has spent his time talking to his team instead.”
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