Here’s how tech start-ups can slash up to 40% of office costs

Traditional office spaces cost US$39,091 pa.

It may be time for Singapore tech start-ups to start ditching traditional office spaces and set up shop in co-working spaces instead.

Property consultancy firm Knight Frank examined the costs of leasing and fitting-out 600 sqft of office space in tech and creative districts of 27 leading cities, including nine from the Asia Pacific region.

“It is conceivable that whilst start-ups led the demand for co-working centres, post start-ups could evolve the demand for hybrid co-working buildings and districts offering a combination of fixed and flexible lease arrangements in a collaborative environment," he added.

The study revealed that for tech start-ups, Singapore is the 10th costliest city in terms of real estate. A start-up looking to set up their own office would have to pony up US$39,091 per annum (pa). Meanwhile, opting for a co-working space might slash up to 40.9% of this, leaving start-ups with US$23,105 pa in costs.

Meanwhile, landlords shouldn't bank on sector growth to drive up demand, stated Calvin Yeo, executive director and head of Office Advisory, Knight Frank Singapore.

"Going forward, the providers of technology and creative business park space in Singapore cannot assume that the demand for traditional leases will increase with the growth of the sector,” Yeo asserted.

"It is conceivable that whilst start-ups led the demand for co-working centres, post start-ups could evolve the demand for hybrid co-working buildings and districts offering a combination of fixed and flexible lease arrangements in a collaborative environment," he added.