As seen on Channel News Asia
, Work-from-home (WFH) is now the current reality brought upon by the continued presence of the recent pandemic. This situation may continue for a bit longer, with the Ministry of Health requiring companies to retain the current working arrangement in light of the recent increase in cases within the community.
Due to this, there are now significant implications for the office property market that will reshape its future outlook.
The future of offices
With safety precautions in place to prevent the virus from spreading further, the current demand for small offices to rent
has been culled. This decline has created a ripple effect extending to other related entities such as mass transport, building management, and F&B businesses within the vicinity of these spaces. As a result of the islandwide vacancy rate rising to 11 per cent, prices on office rentals and prices saw a decline of 0.8 per cent and 4 per cent, respectively. However, despite that, there was a perceived increase of 33,000 sq m in office space.
The adoption of remote working has shaped opposing forces regarding the continued need for huge office spaces. On the one hand, the key ingredients of success, creativity and innovation, are most prevalent when working face-to-face in the same location with colleagues and clients. But on the other hand, the unceasing progress of technology and its new advancements that enhance remote working is sure to bring an irreversible and permanent change in workplaces.
Transformation and redevelopment of the CBD
The inevitability of companies lowering their footprint and space needs within the CBD and relocating to other branches prompts the CBD’s transformation. A possible change in store could be the evolution from being a single-use district to a more diverse
, mixed-use one.
Such a change isn’t unprecedented, given that former prime financial streets in the ’70s and ’80s, such as Cecil Street, Robinson Road, and Shenton Way, are now redeveloped for mixed and residential use.
Coworking’s impact on the market
As mentioned, downsizing caused by the need for segregation of non-essential operations may have more companies turning to coworking spaces as a feasible option. Despite closing down some of their common areas for safety purposes, their services continue to be available. In addition, businesses are continuously leveraging their services due to their flexible lease tenures and better space planning.
Additionally, these coworking firms may also undergo a change of their own from being massive, open-plan areas typical of their industry to more private and dedicated spaces. Due to the increasing number of businesses opting for these coworking spaces, landlords and office property owners are taking notes from such firms and are shifting their inflexible leasing terms to be less restrictive and offer more adaptable space.
The lingering presence of the pandemic has served as a wake-up call for firms to rethink their business models to survive in the new economy. The same can also be said to landlords that own large office spaces in their portfolios.
It is evident that the office real estate market may see a drastic change post-COVID, but with adaptability and creativity, customers will still feel inclined to use an office space due to the various benefits that physical interaction brings about.
If you’re looking for a suitable office space for your business, LHN Group offers several spaces to accommodate your needs. On the other hand, you can also find industrial, residential, and commercial spaces available. We have warehouses for rent near Woodlands and Eunos, and many other types of spaces available all over Singapore. With the right type of space, you can better meet your business needs.
At LHN Group, there is an array of units available - varying from commercial, office, industrial to residential use. In fact, we have industrial spaces for rent near Aljunied
and Admiralty, as well as many other kinds of units across Singapore. Find a suitable type of space to accommodate your business requirements at LHN Group.