Co-working spaces are rapidly becoming one of the major players in the office arena here.

The sector now accounts for 3.7 million sq ft in net lettable area of commercial space, tripling from 1.2 million sq ft in 2015.

It is now one of the top six occupier sectors, said Colliers International, which tipped that number to grow by 24 per cent this year, driven by demand from multinationals and new start-ups.

The sector has also seen a 36 per cent growth in compound annual growth rate by net lettable area.

But the firm added in a report yesterday that the pace of growth might slow to 15 per cent due to a higher base and tighter vacancies.

The top occupier sector in the Central Business District (CBD) Grade A office space is financial services. This is followed by professional services and technology; media and telecommunications; resources, energy and commodities; and consumer.

Flexible workspaces now account for 5 per cent of CBD Premium and Grade A offices, said the report.

It also noted that 83 per cent of flexible workspace is in the CBD, 12 per cent is in the city fringe, and 5 per cent is in the suburban area.

WeWork is the leader of the pack with 22 per cent of the pie or 850,000 sq ft in portfolio size.

IWG is next at 16.6 per cent with 640,000 sq ft, and JustGroup at 12.8 per cent and 498,000 sq ft. These three have 51 per cent of the space.

Colliers said bigger operators have been scaling up their portfolios aggressively, while some of the smaller players with no economies of scale were either acquired or squeezed out.

Its research found that most of the closures came from single-space operators with an average floor area of 7,500 sq ft.

Colliers research head Tricia Song said Singapore is considered "one of the most mature" markets in Asia for flexible workspace.

She added: "We believe it will continue to advance and expand, given the still-low penetration rate of 5 per cent."

Operators keen to grow may expand into fringe areas of the retail or hotel space due to tight vacancy rates in the CBD.

Colliers added that the sector's outlook would also "change significantly" should conventional landlords launch their own co-working products and enter the market as opposed to offering long-term leases to established operators.