SINGAPORE – Co-working spaces are bustling again after a lull during the Covid-19 pandemic.
Several operators here told The Straits Times they have been expanding their offerings amid rising occupancy rates, spurred by greater demand for flexible work arrangements.
Start-ups with limited resources and smaller headcounts are among those flocking to such workspaces due to the flexibility and convenience that they offer.
However, some users have raised concerns over rising costs, while property experts point to a potential slowdown in the industry.
Co-working space operator The Great Room said its occupancy rates rose from an average of 90 per cent both before and during the pandemic to roughly 95 per cent to 100 per cent in 2023 across its six locations in the Republic, as hybrid work arrangements became more prevalent post-Covid-19.
The company introduced several new amenities for its 3,000-strong tenant base, which includes individuals working in family offices and fintech firms.
These amenities include complimentary breakfast on Mondays, as well as shared facilities such as nursing rooms and podcast studios.
The Singapore-headquartered firm said that it has recorded an average year-on-year revenue growth of 30 per cent in Singapore since 2019.
It charges tenants between $750 and $1,300 per month, depending on the amount of credits they wish to buy to book communal meeting rooms, as well as whether they want hot desks or a dedicated office.
Another operator, The Work Project, said its 10 co-working spaces across Singapore are 90 per cent occupied on average. The average occupancy rate was about 84 per cent in 2020.
Its tenants vary from multinational corporations to small and medium-sized enterprises and start-ups. They pay between $480 and $1,100 for a desk, depending on whether it is a hot desk or situated within a dedicated office.
The company said that it has doubled its revenue since 2020.
Some of its office features include executive lounges and a members-only bar located at its Capital Tower space. It also recently installed more phone booths in each co-working space to cope with an increase in videoconferences.
Meanwhile, New York-headquartered WeWork, which has 14 locations in Singapore, opened its largest location in the Asia-Pacific in September 2022 – a 213,000 sq ft facility spanning 21 floors at 21 Collyer Quay.
A WeWork spokesperson said the demand for flexible work arrangements post-Covid-19 has led to an increase in the number of pay-as-you-go users, which doubled in the first quarter of 2023 compared with the same period in 2022.
Pay-per-month users also grew by 28 per cent in the first quarter of 2023 compared with the same period in 2022.
The company, which was reported to be facing financial issues in August, declined to reveal its current pricing structure and occupancy rate.
Competitor IWG said it is seeing “very strong levels of demand and occupancy” across its Singapore locations, but declined to provide exact figures.
Ms Tricia Song, head of research for South-east Asia at property consultancy CBRE, noted that occupancy at Singapore’s co-working spaces has rebounded from an average of 50 per cent to 60 per cent during the pandemic to reach an average of 80 per cent to 90 per cent by the third quarter of 2022.
There were 176 co-working spaces in the Republic with an estimated footprint of nearly 4 million sq ft in the third quarter of 2023, making up about 5 per cent of office space here.
This is one of the highest shares in the Asia-Pacific region, CBRE’s research found.
The industry has grown exponentially over the past decade, from 85 co-working spaces with an estimated footprint of 820,000 sq ft in 2013.
Looking forward, property experts expect the co-working market to continue to expand at a similar or slower pace.
Ms Song said: “As at the third quarter of 2023, the flexible workspace market has grown by 5 per cent from end-2022. With at least three centres set to open or expand in the current quarter, market size is expected to reach 4.06 million sq ft, representing an increase of 6 per cent year on year for 2023.
“We can realistically expect co-working spaces to continue growing at about 4 per cent to 6 per cent in 2024, at a similar pace as in 2021 to 2023.”
Colliers International managing director Bastiaan van Beijsterveldt, however, said that the growth of Singapore’s co-working market might have slowed in 2023.
He said: “This deceleration is largely due to a saturated market in the Central Business District and reduced funding by investors, spurred by concerns of the global economic performance.”
Users of co-working spaces highlighted pros and cons of their workplace environment.
Singapore-based expert network Sealed Network, which links businesses with relevant experts, said that co-working spaces offer start-ups like itself more convenience and flexibility.
They can also gain access to shared amenities and resources such as office furniture, Internet and meeting rooms.
However, Sealed Network co-founder and chief executive Benjamin Lee noted that the monthly cost of renting a co-working space in Singapore can be considerably higher than in other countries.
“It’s very expensive in Singapore. For other countries, the cost is sometimes very low, but the location is still premium,” he said.
Sealed Network currently has four offices – in Singapore, Malaysia, Indonesia and the Philippines. The offices in Singapore, Malaysia and Indonesia are housed within WeWork, while the Philippines office is housed in another co-working space called Common Ground.
Singapore-based health start-up MiyaHealth, which rents a dedicated office at The Work Project, said that having its own private office does not make financial sense given its limited size.
MiyaHealth chief executive and co-founder Ramesh Rajentheran said: “Our co-working space not only offers a cost-effective alternative, but also covers a lot of office administrative work, which saves our team time and effort.
“It offers opportunities and resources that strike a balance between focused work environments and opportunities for in-person collaboration, whether among our own team members or with peers sharing the same workspace.”
Still, MiyaHealth group corporate development manager Therese Joson said there are areas that could be improved, such as Internet speed, pantry amenities and the jostle to book communal meeting rooms during busy periods.
Cost is another issue, as rental is “getting expensive”, she said.
Although employees can work from home, they still go in to the office to collaborate at in-person meetings, she said.
Ms Joson added that she personally prefers a private office as it is easier to form relationships with her colleagues and build the company culture.
Referring to MiyaHealth’s private office in Malaysia, she said: “It’s a nicer atmosphere, when you go into an office that has your branding and a brainstorming space that you and your colleagues set up. There’s just more warmth in that setting.”
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