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Here’s why SMEs won’t make a splash in Singapore’s real estate market
They’re unpredictable, analysts say.
Renting an office is a tremendous commitment small and medium enterprises (SMEs) can afford to dive into, resulting in unpredictable demand patterns.
According to a report by CBRE, despite the prevalence of SMEs, their impact on the office sector have been disproportionately smaller, comprising a small proportion of office leasing volume.
The report noted that one of the main reasons for the lower office take-up by SMEs has been the mismatch in their needs versus the type of available office spaces.
“SMEs traditionally have much smaller space needs due to the fewer number of staff they employ as well as tighter budgets they work with,” CBRE added.
In fact, according to Singstat, the average budget for companies in the services cluster for renting of office, shops, and other premises ranged from 0.15% to 18.10% of their operating receipts.
“Depending on the quality and location of the office space, this will translate to an office take-up in the range of 200-450 sf,” the report added.
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