reportFlex office space occupancy in Asia Pacific rises 6% y-o-y in 1Q2023: CBRE report

According to a sector report by CBRE, the total volume of flexible office workspace in the Asia Pacific region reached 87 million sq ft as of March, representing a 6% increase from September 2022. By the end of 1Q2033, flex office spaces had penetrated about 4% of the total regional office supply. The proportion of flex spaces in Grade A office stock also rose from 3.1% in 3Q2022 to 3.5% in 1Q2023, reflecting the strong demand from flex space operators seeking to upgrade their centres to more Grade A buildings.

Regionally, the top three occupiers of flex office space are tech companies (35%), business services (16%), and finance-related companies (12%). In Singapore, the proportion of flex office penetration in the overall office market is about 5.4%, translating to a total volume of about 4 million sq ft in the city-state.

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Current economic uncertainty is making portfolio flexibility increasingly important and driving occupier demand for cost-effective solutions. CBRE’s survey of occupiers in the region uncovered that more than half of the respondents believe that the proportion of flexible office space in their portfolios is under-allocated, and they intend to increase its use in the coming months.

As per the report, tech firms remain the largest occupiers of flex office space in the region in 2020. On-demand workspaces, which are pay-per-use solutions, are also expected to witness a steady rise this year. Furthermore, the demand for dedicated workspaces, as well as events spaces and office access passes, is likely to be driven by capital expenditure concerns.