Growth momentum in the flexible workspace sector in Singapore is expected to power on, underpinned by the entry of operators from overseas and supplemented by aggressive expansion plans of incumbent operators. This is according to Colliers International’s research report, “Breaking New Ground”, released on Sept 10.
Colliers says the flexible workspace sector, which took up 680,000 sq ft of space last year, is now one of the top five occupier sectors in the Singapore office market. It accounts for 4.5% of the CBD Premium and Grade A office stock.
The total flexible workspace footprint has nearly tripled, from about one million sq ft at end-2015, to about 2.7 million sq ft in June 2018. Eighty-four per cent of Singapore’s total flexible workspace footprint is located within the CBD. Flexible workspace operators have also set up on the fringe of the CBD recently, in addition to the initial core clusters around Raffles Place.
These operators have also shown an increased interest in expanding within Orchard Road, Singapore’s prime shopping district. According to Colliers, the flexible workspace footprint in the Orchard Road area accounts for about 8% of the islandwide total by square footage.
The oncoming flexible workspace supply could pose a challenge to underperforming operators, says Colliers. Meanwhile, larger players with sizeable footprints of more than 50 desks per location and a multi-location portfolio are expected to be better equipped to cater for the next lap of growth from corporations seeking a flexible leasing strategy.
Single-space providers, however, will perform well if they can cultivate a strong competitive proposition with a specific focus and add value to the entrepreneurial community in Singapore, says Colliers.
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