Rise of co-working spaces boost office and retail scene

In Singapore, where rental takes up a big part of a business’ overheads, “co-working” has become quite the word-of-the-year.

Co-working spaces change direction of office and retail market

Not only are more shorter-term courses popping up from making your own guitars to learning to paint or bake; smaller business entities are also finding it more efficient to share resources.

Rents climbed 2.4% in Q3, a quick move ahead from the 1.1% decline in Q2. Co-working operators are taking up more spaces in newly-completed buildings.

5 Shenton Way (Office Tower). Picture: UIC

Take for example JustCo who has taken up 2 floors in UIC building in Shenton Way; or The Work Project‘s occupancy of the entire 4th floor in OUE Downtown and WeWork‘s Beach Centre address.

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In the retail scene, more malls are reinventing themselves as “community hubs” rather than relying on incumbents.

Though the big brands are still around to take up major floor space in the more popular malls, some are partnering up with co-working spaces to increase footfall. Pop-up shops and events are becoming the norm rather than the exception.

Rents and occupancy rates increase in Q3

All this will no doubt change the face of the office and retail market. A shift from ownership to rental, and perhaps a shift from long-term rental to a shorter-term one. It has boosted the office scene in particular as landlords now find it may profitable to provide the short-term rental. And earn a steady profit from it.

And for those with deeper pockets, the benefits of buying a commercial space is becoming more visible. There are many more ways to earn back the investment, both in the immediate future and in the long run.