Flexible workspace market in Asia-Pacific grows 6% from 3Q2022

The Asia Pacific region’s total volume of flexible office workspace has seen an increase of 6% as of March, according to a sector report by CBRE. This marks an impressive jump from the situation in September 2022, when the total volume was recorded at 87 million square feet. The flex office penetration rate of Grade A office stock has risen from 3.1% in 3Q2022 to 3.5% at the end of 1Q2023.

Singapore’s proportion of flex office penetration in the overall office market currently stands at 5.4%, meaning that the total volume in the city-state is approximately 4 million sq ft. Global real estate firm CBRE attributes this increase to ongoing economic uncertainty strengthening the importance of portfolio flexibility and prompting companies to focus more on cost management.

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It was found that the three biggest occupiers of flex office space in the region are technology companies (35%), business services (16%) and finance-related companies (12%). In addition, a survey of occupiers revealed that more than half of the respondents believed that their portfolios were under-allocated towards flex space, and had plans to increase their use of it in the coming months.

Tech firms are expected to remain the region’s largest occupiers of flex office space this year, with capital expenditure concerns driving the preference for dedicated workspaces. There is also a higher demand for event spaces and office access passes, while on-demand workstation solutions (pay per use) are likely to experience an increase in popularity.

Overall, while the total volume of flexible office workspace in the Asia Pacific has seen a surge in numbers, the significance of portfolios focused on such spaces has taken on greater importance during the COVID-19 pandemic. Companies have become increasingly aware of the need for flexibility and effective management of costs in order to remain competitive in the market.