Real Estate Market Outlook: How New Ways of Working are Reshaping the Singapore Office Market

COVID-19 had accelerated trends that are reshaping the workplace and are presenting new opportunities for businesses.

The COVID-19 pandemic in 2020 has – for better, or worse – altered and challenged the definition of how we, as a workforce, interact, socialise and collaborate.

In 2020, flexible workspace grew to be more than a buzzword and a space with the bells and whistles of a modern office. The adoption of flexible working practices accelerated, as workplaces everywhere implemented social distancing and safe management measures. Working from home (WFH) became a norm, and as more new ways of working were embraced, sentiments towards a physical office space gradually shifted as companies re-evaluated its relevance in the current working climate.

But does this spell the end of the physical office? In this Real Estate Market Outlook, Capital Markets and Investments Services expert Ling Wei Kong (LW) sat down with Managing Director WeiLeng Tang (WL) and Head of Research Tricia Song (TS) to discuss the Singapore Office Market and why the demand for office space is still here to stay.

"Certainly, COVID-19 has accelerated trends that are reshaping the workplace and are presenting new opportunities for businesses."

LW: With WFH still recommended by default for most of the workforce, do you foresee the demand for traditional offices to decline in the longer-term? 

WL:  The office is still relevant and is here to stay as it remains an anchor for collaboration and promotion of corporate culture.

There is a need to separate work life and family life for our mental well-being. While many businesses have embraced digital transformation and technology at a greater speed in 2020, people want to go back to the office.

The concept of WFH is well-liked and received, however, having teams to work remotely and separately may inhibit building a strong culture. New joiners would find it harder to integrate into the team.

As human beings, we need interactions to stimulate our minds and creativity.

Moving forward, what are the factors that will drive the office market demand?

WL:The economic outlook remains uncertain and many firms are still undecided on their space requirement. Occupiers are unlikely to make significant commitments until they see more clarity on the situation.

"Flexible workspace offers a great solution in bridging the gap between the demand for more space (with safe distancing) and the separation of work from home."

The advantage of the flexible working experiment is that it has demonstrated that most employees can do their jobs remotely, and a flexible workspace offers a great solution in bridging the gap between the demand for more space (with safe distancing) and the separation of work from home.

Certainly, COVID-19 has accelerated trends that are reshaping the workplace and are presenting new opportunities for businesses. We forecast a continued increase in demand for flexible workspace in Singapore, as corporates seek shorter-term commitments.

While rents in the Singapore CBD are higher than the city fringe, occupiers would still be willing to pay for what the location offers

TS: Singapore is also one of the top locations for Tech Occupiers in Asia – with a great talent pool, a very stable government and world-class infrastructure.

With a tech industry worth over US$60 billion – the highest in Southeast Asia – there’s no surprise that tech giants have come and will continue to set up bases in Singapore.

WL: The Central Business District (CBD) will also remain relevant for businesses as it is the concentration zone for all the buzz and fast-paced activities.

Although rents in the CBD are about 23% higher than in the city fringe, CBD occupiers would still be willing to pay higher rents for what the location offers, even if they take up a smaller footprint.

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WeiLeng Tang

Managing Director | Head of Capital Markets Singapore

Capital Markets & Investment Services

Singapore

+65 6531 8688

WeiLeng is the Managing Director | Head of Capital Markets in Singapore and is responsible for the growth of Colliers' Capital Markets & Investment Services team. An exceptional leader of great entrepreneurial spirit, WeiLeng possesses strong capital markets expertise and proven track records. She is adept in advisory and brokerage, as well as principal real estate. With more than 25 years of experience in the real estate industry, she excels in building deep client relationships and extensive industry network.

WeiLeng has a strong collaborative culture and regional outlook, which enables her to fully connect Colliers Singapore to our other businesses within Asia Pacific and across the global platform. It creates added value for clients who now demand highly effective solutions spanning from country to country.

Capital Markets is her expertise. Her first foray into real estate began nearly three decades ago when she was headhunted by government service. She has since accumulated a wealth of experience in selling buildings, hotels and development land. She sold her first office building at 20 Malacca Street at Raffles Place – just barely one year into her new role. That same relentlessness saw her through many more deals, some bigger, others smaller. Over the years, she has developed an excellent network and invested in strong relationships.

She often gets the question, "What drives you?", which she usually answers, "the inexplicable joy I see on my clients' face when I close a deal!" By building trusted relationships, she has successfully entered into joint ventures with both CapitaLand and City Developments Limited (CDL), during her stint on the buy-side with Wells Fargo (then Wachovia Real Estate).

Having three daughters of her own that are coming of age, she understands her people's aspirations and recognises the acceleration of success of her people as one of her key focuses, where she mentors and nurtures them in becoming the next generation of leaders.

Colliers has given her tremendous space to accelerate her success, and she would like to accelerate yours too. Connect with her today!

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LingWei Kong

Senior Director

Capital Markets & Investment Services

Singapore

+65 6531 8657

+65 9711 2913

Lingwei has over thirteen years’ experience in the real estate sector and vast market knowledge of both APAC and EMEA markets (Capital & Leasing Markets). LingWei worked in Paris, London and currently in Singapore.

LingWei provides strategic investment advisory and brokerage services to clients, focusing on investment-grade properties. She provides the best strategic solutions and advice to clients so that they can maximise all real estate investment opportunities in Singapore.

Prior to joining Colliers Singapore, LingWei worked in the JLL Asia Capital Markets team (based in Singapore) and led the Capital Markets Core Client Program.Through this program, Lingwei worked with wider team to create and share client insights and developed effective account plans.The program covered 35 top regional clients with combined AUM over USD217 billion, clients including Allianz, ARA, Blackstone, Brookfield, Nuveen, PGIM and others. Lingwei facilitated personalised and intelligent client conversations, and ultimately won more business and growing share of wallet with these core clients. Lingwei also looked after the Singapore capital who is actively looking for investment opportunities outside the AP region.