Office rental market blooms with growth of co-working spaces

Hip modern furnishings, a wide-open meeting area with greenery and high ceiling, perhaps even a coffee area with baristas serving special brews.

You might think you’re in a cafe in some cosmopolitan city, but in fact, it is a functional and comfortable place you could hold your business meetings or work for a day, a month or a few.

Co-working spaces are fast growing in popularity here in Singapore and thus boosting the office rental market.

CBD, Singapore. Picture: iProperty

Co-working market expected to grow 50% this year

Some of the current players in the co-working market include WeWork, JustCo and The Working Capitol. There are also many other boutique firms which offer cosy spaces with facilities specific industries require.

The expansion of the number of these co-working spaces means investors may be actively looking at taking up the office or commercial spaces. Co-working spaces currently take up 21% of the overall office space demand last year. This is up from 2017’s 15% market share.

This year, analysts are expecting the co-working market to expand by 50% from a 1.4 million sq ft market size to more than 2 million sq ft. Market expansion and increase in office occupancy may, however, mean a corresponding increase in office rental prices as building owners raise rents on remaining units.

See more: World’s largest companies to shift focus towards flexible workspace

Need for more flexibility in working spaces

As we step further into the 21st Century, not only are private entities realising the need for more fluid working spaces, the government is picking up on that as well. In 2014, the Infocomm Media Development Authority (IMDA) developed Smart Work Centres in 3 public libraries. In these pay-per-use workspaces, users can make use of meeting rooms, Wi-Fi and photocopiers.

Developers such as Keppel Land and CapitaLand have also adapted their strategies to include co-working spaces in their portfolios. The former has set up its own co-working brand called Kloud and CapitaLand has a 50% share in The Work Project Kingdom.

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