Flexible office providers grew their footprints in Singapore by 680,000 square feet in 2017, jumping 44 percent from the previous year, according to a new report from Colliers International.
Asia is the fastest-growing market for flexible office space, but as companies snap up lease agreements, questions remain about customer demand.
By the end of June, flexible office space companies occupied 2.7 million square feet in Singapore, up from 1 million square feet in 2015.
More than 85 percent of flexible workspace in the country today is in the city-state’s central business district.
“We estimate that the flexible workspace footprint in Singapore could rise by 30-35 percent year-on-year for the whole of 2018,” said Duncan White, head of office services at Colliers International in a statement.
“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.”
The city’s Orchard Road shopping strip has becoming an appealing target for co-working operators and now accounts for 8 percent of the country’s flexible office space.
There is some skepticism about the long-term viability of the flexible office space business model as the market rapidly expands.
According to the Colliers report, “The rapid supply growth of small-sized, single-space flexible workspace operators may have outpaced underlying market demand, which mainly stems from small-sized businesses or freelancers.”
In the city’s most popular areas, utilization rate for flexible workspace can be as high as 90 percent, according to the report.
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