SINGAPORE – The demand for flexible workspaces in Singapore rose by 25 per cent in 2022 compared with 2021, and it was also costing more to use these spaces, according to global workspace specialist The Instant Group.
Businesses appeared to have fully embraced hybrid working solutions, with more firms encouraging employees to return to the office in some form, it said in a report released on Monday.
However, despite demand growing in 2022, the supply of new flexible workspaces grew at a slower pace, with an increase of just 3 per cent in 2022 compared with 2021. This was a trend experienced by multiple countries across the Asia-Pacific region, where markets with the highest demand growth also saw the poorest supply growth, said the report.
The Singapore Flexible Workspace Market Review is an annual report produced by The Instant Group. The first edition was released in 2022. Beyond Singapore, the group also reports on Britain, the United States, France, Germany, Hong Kong and Australia.
Across the Asia-Pacific region, Singapore received the largest number of inquiries for flexible workspaces in 2022 and is currently a close second behind Sydney in 2023. The report further noted that larger companies had entered the flexible workspace market in Singapore, with demand for large spaces (more than 10 desks within the workspace) increasing by 53 per cent in 2022 when compared with 2021.
Demand from technology companies increased by 60 per cent in 2022 compared with 2021, and consulting firms took up 25 per cent of the flex market share across Singapore.
One has to pay more for flexible workspaces in Singapore too – rates went up by 15 per cent in the first quarter of 2023 compared with the whole of 2022, the report found. This was because of the high demand for such workspaces, and inflation.
The Orchard Road area saw the biggest jump in prices. Rates went up by 17 per cent in the first quarter compared with 2022, with a desk in a flexible workspace costing an average of $958 per month.
Mr Sean Lynch, managing director for Asia-Pacific at The Instant Group, noted that there were more than 250 flexible workspace locations across Singapore, placing the country in the top 10 across the Asia-Pacific region. “However, more supply will be needed if demand continues to grow. With high demand and low supply, this can lead to a rise in property values and rents for occupiers,” he said.
The report also noted that demand for flexible workspaces dropped by 44 per cent in the first quarter of 2023 compared with the previous quarter, due to the higher desk rates. That said, the number of transactions across Singapore was 15 per cent higher in the first quarter of 2023 compared with the preceding quarter, despite the increase in rates.
“Flexibility and agility are key pillars for many businesses that are choosing to move into flexible office spaces across Singapore,” said the report.
