Join Patrick Gidney as he shares his experience in the Flexible Workspace sector and why this could be an interesting space to watch out for.
My professional experience has been in tenant representation, but most recently, I was working for IWG – the world’s largest flexible workspace provider. At Colliers, my role is to advise occupiers on their office strategy in Singapore, which in some instances will be implementing flex into their workplace offering.
Key players in the market are gearing up for growth again as the economy recovers, and the post-pandemic workplace is leading towards more hybrid ways of working, and we expect the market to accelerate further. Colliers Research forecasts a 5% growth in 2022 and 2023, and in my opinion, this is a very conservative number and here are some of the trends we can all expect.
Growth acceleration for the most established co-working operators
The more established co-working operators will see their growth accelerating due to their stronger financial positions. The past 18 months have been challenging from both an occupancy and pricing perspective, many smaller players are still focused on simply keeping their business going. However, the better-financed operators have rationalised costs, improved liquidity and are now able to take advantage of the growing demand.
Consolidation of number of operators
Although the flexible workplace industry will grow by total sq ft, there will be a consolidation of the total number of operators in Singapore. With a strong mix of international, regional and local players, Singapore is the most competitive market for the flexible workspace in Asia. On top of that, many landlords also want a piece of the action. Naturally, not all will survive.
With already a great variety of products and brands, those with robust sales platforms and relationships with mainstream corporates will be best positioned to capture the demand. Unless the smaller players have a strong niche, this will inevitably lead to M&A opportunities across the industry.
Demand for suburban locations will continue to grow
With more hybrid ways of working and employees wanting to work closer to home, the demand for suburban locations will continue to grow. We can expect the operators will want to grow their networks across the island to meet this demand. Currently, 84% of centres are in the CBD, 13% in the City Fringe and only 3% in suburban areas. Although CBD will always represent the big piece of the pie with generally larger spaces, this will start to balance out.
So what does hybrid working mean for occupiers in Singapore? There is no one-size-fits-all solution, and it comes down to the organisation’s unique goals, the business functions located here and corporate culture. These will determine the best balance between office, work from home and co-working. This is a balancing act, especially since Singapore has a tight labour market with a great fight for talent. Jumping too far into either the work from home camp or all back to the office camps could have significant repercussions.
We are increasingly advising clients on this, and some of our designed tools can help evaluate this.
Interested in finding out more about flexible workspace? Listen to the full Colliers Singapore Property Insights Podcast – episode 5 | Flexible workspace in focus (10 minutes) below.
You may also like:
- Property Insights Podcast: Flexible workspace in focus
- Expert spotlight: Patrick Gidney, Senior Director, Occupier Services
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