Stagnant growth plagues Singapore's workspace market

Demand only grew 1% since 2019.

Demand for flexible workspace in Singapore has increased by only 1% since 2019, indicating a stagnant market.

The Instant Group's 2024 APAC Flexible Workspace Market Review, however, revealed that some submarkets in Singapore, including Suntec (+9%), Tampines (+4%) and One-north (+4%) are "faring better" in terms of demand.

"Occupiers are focused on controlling costs and driving for the best value for money from their assets. Companies in the finance, legal, shipping and tech sectors continue to focus on the CBD for their flexible office needs," The Instant Group reported.

"As availability becomes limited in the CBD, some companies are exploring areas like Suntec and other city fringe locations, reflecting market evolution in workspace preferences," the marketplace added.

In Suntec, the report explained that heightened demand for flexible space and a supply shortage are driving rates upwards. The desk rate in Suntec has risen 24% since 2019, at $949.

Meanwhile, the report said a surge in demand for traditional offices
within Suntec "may also result in rent increases for flex operators during their renewal terms, which may also have a knock-on effect on desk rates."

"As a result of larger companies looking to base themselves in Suntec, the average requirement size has increased by 14% since pre-pandemic and is currently the highest in the country," the report highlighted.

Demand recovery drove rates up in One-north and Tampines, which saw rates grow by 2% to $661 and 6% to $599, respectively.

The submarkets are attracting demand from smaller companies looking for a base outside the city centre, said The Instant Group.