Singapore, 10 September 2018 – Colliers International (NASDAQ and TSX: CIGI), a global leader in commercial real estate services, expects the positive growth momentum in the flexible workspace sector in Singapore to power on, underpinned by the entry of operators from overseas markets, and supplemented by aggressive expansion plans of incumbent operators.  

In its latest Colliers research report Breaking New Ground released today, Colliers found that the flexible workspace sector took up a record 680,000 sq ft of space in 2017, representing a 44% surge from a year ago -  the steepest annual growth in the sector’s history. It is now one of the top five occupier sectors in the Singapore office market, accounting for 4.5% of CBD Premium and Grade A office stock. 

Total flexible workspace footprint across Singapore has nearly tripled since the end of 2015, from about 1 million sq ft to about 2.7 million sq ft as at June 30, 2018. Majority of the Singapore market’s total flexible workspace footprint – about 2.3 million sq ft or 84% - is located within the CBD. More recently, flexible workspace operators have also set up in locations at the fringe of the CBD, in addition to the initial core clusters around Raffles Place.


Fig.1: Selected flexible workspaces transacted in H1 2018

Flexible Workspace


Estimated Size

(sq ft)


139 Cecil Street



8 Cross Street



Paya Lebar Quarter Tower 1



TripleOne Somerset



22 Cross Street



Vision Exchange



100 Amoy Street



Macdonald House


The Work Project

Parkview Square


Source: Colliers International Singapore Research

Colliers believes the increasing adoption of a ‘flex’ office component as part of corporations’ commercial leasing strategy – in sectors including banking and financial services, insurance, and technology - will be a crucial catalyst for the sustainable, long-term growth of the flexible workspace sector. The growth of flexible workspace should loosely support net absorption in Singapore’s office sector over 2018-2022. 

Mr. Duncan White, Head of Office Services at Colliers International, said, “Growth in the sector will remain fairly robust. We estimate that the flexible workspace footprint in Singapore could rise by 30-35% (or by about 670,000 sq ft) year-on-year for the whole of 2018. However, given the tight vacancy rate for Premium and Grade A office space in the CBD, we expect flexible workspace operators will increasingly target Grade B office properties and retail spaces to accommodate their growth. This expansion in non-core CBD locations and decentralised markets will offer a wider range of choice and cost-alignment for potential flexible workspace occupiers.”

As at 30 June 2018, the top seven flexible workspace players in Singapore controlled about 63% of the market. They were: IWG (which includes brands like Spaces and Regus); WeWork; JustGroup (the parent company of the JustCo and JustOffice brands); The Executive Centre; Servcorp; Campfire; and The Great Room. The remaining 37% of the flexible workspace market in Singapore is shared among more than 110 other operators.

Retail-to-flexible workspace conversions on the rise, Orchard Road gaining interest among flexible workspace operators
Colliers projects retail-to-flexible workspace conversions to pick up pace in the years ahead. Simultaneously, there appears to be rising interest among flexible workspace operators in expanding within Orchard Road, Singapore’s prime shopping district. 

Recent leasing deals in Orchard Road included: a 15,000 sq ft lease by The Great Room at Ngee Ann City Tower B; JustCo taking up 16,000 sq ft at Macdonald House; Spaces’ new location spanning 35,000 sq ft at TripleOne Somerset; and new-to-market CoCRE8 which leased about 4,000 sq ft of office space at International Building. All four deals marked the respective operators’ first foray into the Orchard Road area.

Ms. JM Tan (陈洁梅), Senior Analyst of Research at Colliers International, said, “The rise in retail-to-flexible workspace conversions is likely an adaptation to a tough retail leasing climate in Singapore. Retail vacancy stood at 7.3% as at the end of Q2 2018, with 4.8 million sq ft of vacant floor area across shopping centres and retail podiums islandwide, while Central Region retail rents have chalked up a long-running decline over the past 13 quarters. These factors may have prompted landlords to explore leasing to flexible workspace operators, in a bid to achieve more stabilised occupancy for their retail properties. The trade-off is lower gross rental income for the property as flexible workspace operators will be paying office rents, which are usually lower than retail rents.”

Based on Colliers’ research, the flexible workspace footprint in Orchard Road currently accounts for about 8% of the islandwide total by square footage. The highest concentration of flexible workspace centres remains in Raffles Place/ New Downtown and Shenton Way/ Tanjong Pagar, which host 41% and 29% of Singapore’s total flexible workspace footprint respectively.

Intense competition prompts generous incentive offerings
As competition heats up within the sector, some operators are offering generous sign-on membership incentives, ranging from one month's rent-free or up to six months' rent-free for a typical 12- to 24-month flexible workspace membership tenure. In parallel, free trial offerings may run from a typical day pass, up to an entire month's free usage. 

Additionally, flexible workspace operators have sought to diversify their revenue streams by making event spaces available for lease or by partnering on-site food and beverage (F&B) or wellness providers, offering low base rents in return for a share of profits with gross turnover rent structures.

The oncoming flexible workspace supply could likely pose a challenge to under-performing operators. Colliers expects further consolidation in the flexible workspace sector, with mergers and acquisitions ramping up over 2018-2020 in Singapore. Colliers anticipates that larger players with sizable footprints of more than 50 desks per location, and a multi-location portfolio, are better equipped to cater for the next lap of growth from corporations seeking a flexible leasing strategy. Nevertheless, it notes that single-space providers perform well when they can cultivate a strong competitive proposition, with a specific focus and genuine added value for the entrepreneurial community in Singapore.

Opportunities for occupiers and landlords
With the rapid growth in the flexible workspace sector, small- and medium-sized enterprises can consider spaces in choice locations or in premium builds that may be previously inaccessible to businesses with smaller square footage, while multinational corporations can assess the viability of a “Flex and Core™” strategy, which combines traditional office leases with shorter-term lease tenures in flexible workspaces. 

Mr. White added, “The Colliers-led “Flex and Core™” and “City Campus” initiatives will enable occupiers to be more agile in managing their real estate needs in tandem with shifts in headcount and business priorities. They also help to strengthen employee engagement by providing staff with a community-focused, creative and collaborative work environment within flexible workspace centres.”

For landlords, flexible workspaces – which have become a strategic essential – may act as auxiliary amenities for the tenant mix within the building, enhance the usable space value and overall appeal, or serve as incubators or ‘swing spaces’ for growth-stage or new-to-market companies that may not have adequate scale to secure a viable office lease.

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