Despite being home to the largest startup ecosystem in the ASEAN region, office rents in Singapore have been rising as a result of decreasing supply and rebounding demand from tenants. However, the country’s flexible office space providers have become the biggest leasers of office space, with 3.7 million square feet of net lettable area of commercial space, accounting for 5% of CBD Premium and Grade A offices.
Major players such as WeWork, IWG, and JustGroup - who have a combined 51% of the pie - have set up multiple locations in the city-state to appeal to different sections of the market: financial services, professional services, media and telecommunications, energy and commodities, and consumer goods. So why are flexible workspaces gaining popularity in Singapore?
The Plug-and-Play System
What sets flexible workspaces a part from traditional offices is their plug-and-play setup: all furniture and equipment is already in place, meaning they are move-in ready on day one. This is particularly of benefit to companies testing the market as they can do so at the lowest cost possible by avoiding expenses on setting up an office space. Flexible workspaces, whether a coworking space or serviced office, will also have all utilities set up and reception staff ready to help with any administrative questions.
Due to a lack of supply, particularly in the CBD, office space rentals in Singapore are at a high with the average rent at US$71.43 sqm per month. However, the flexible workspace sector in Singapore has tripled since 2015, offering a pay-as-you-use service. In other words, these workspaces allow companies to simply pay for the time and number of seats that they use on flexible lease terms. This translates to significant cost-savings, particularly in terms of down payments. It also means that there are allowances for growth and the option to expand or scale down as needed.
Particularly important to new entrants in the market, flexible workspaces are known for their community and collaboration culture, with Community Managers in place to help cultivate this. For growing startups, this helps foster their growth as they can network with other individuals or companies who could be potential customers, give advice on an ongoing project, or become a partner in their growth. For corporates, this community is equally as important. As membership of the flexible workspace can range across demographics, corporates can tap into innovation by placing a specific department to work out of a flexible workspace. In fact, studies have also shown that by offering employees more flexibility in where and when they work, it can help with employee retention and recruitment.
Other than telephone lines, internet, a business address, and utility costs, flexible workspaces also provide a whole host of other complementary services to their members that might otherwise be out of reach for some. The type of services will vary between providers, however, some do offer in-house advice or connections to other companies, such as Sleek, to help with incorporation, registration, and accounting regulations in Singapore. These services can also be discounts to gyms and food and beverage outlets exclusive to members of the space.
All in all, if you’re renting a space in a flexible workspace in Singapore - whether a hot desk, a dedicated desk, or a private office - you’ll be assured a cost-effective space that will provide you with a new network and assistance along the way as you develop your business in the Lion City.