Demand for flex spaces up 25% in Singapore in 2022

However, new supply only grew by 3% over the same period.

According to The Instant Group’s 2023 Singapore Flexible Market Review, the flexible office market has fully recovered from the Covid-19 slump, with demand increasing by 46 per cent in 2022 compared to 2019. 

Demand for Singapore’s flexible workspaces was also up by 25 per cent in 2022 compared to 2021 as businesses appear to have fully embraced hybrid working solutions with more and more firms encouraging employees to return to the office in some form. 

Across the Asia Pacific region, Singapore received the largest number of enquiries for flex space in 2022 and is currently a close second behind Sydney in 2023. However, despite demand growing in 2022, supply of new stock has been slower, with an increase of just 3 per cent over the same period (2022 vs 2021). This is a trend experienced by multiple countries across APAC whereby markets with the highest demand growth have also seen the poorest supply growth. 

“There are over two hundred and fifty flex spaces across Singapore which places it in the top ten for the largest supply across Asia-Pacific,; however more supply will be needed if demand continues to grow. With high demand and low supply, this can lead to a rise in property values and rents for occupiers,” said Sean Lynch, Managing Director of The Instant Group APAC. 

Transactions For Larger Workspaces Increase 

The Instant Group’s annual insights report looks in depth at the demand and supply of Singapore’s flexible workspace marketplace, as well as workstation rates, growth and business trends. According to report findings, larger companies have entered the flex market with demand for large spaces (10- 25+ desks) increasing in 2022. In Singapore, demand for 10-25+ desks increased by 53 per cent in 2022 when compared to 2021, and already in Q1 2023, 44 per cent of demand has come from 10 - 25+ desk size enquiries. This demand is also translating into transactions, with deals for 10-25+ desks up by 40 per cent in 2022 when compared to 2021. 

Demand from companies that work in the technology sector increased by 60 per cent in 2022 when compared to 2021, while consulting firms take up the majority of the market share (25 per cent of all transactions) within flex across Singapore. The Instant Group’s report findings also reveal that the average contract lengths for firms occupying flexible workspace are continuing to increase, up by 37 per cent in 2022 when compared to 2021. 

Rates For Workstations Continue To Increase 

In Q3 last year, 50 per cent of flexible workspace operators across APAC suggested that they would increase their rates between 6-15 per cent over the coming year. According to Instant’s findings this is now beginning to take place with desk rates across Singapore in Q1 2023 up by 15 per cent on average compared to the whole of 2022. In the Orchard area, desk rates have increased the most, up by 17 per cent in Q1 2023 vs the whole of 2022 with a desk costing an average of 958 SGD per month. Rates for Singapore’s Central Business District and Tampines are up by 9 per cent and 2 per cent respectively, while Suntec rates have dropped by 1 per cent.  

These rate increases are having some impact on demand, with demand down in Q1 2023 by 44 per cent compared to the previous quarter (Q4 2022). Despite this drop in demand, the number of transactions across Singapore were up by 15 per cent in Q1 2023 when compared to Q4 2022, signalling that flexibility and agility are key pillars for many businesses who are choosing to move into flexible office spaces across Singapore.