In the next 10 years, major towns in the US are expected to have the best future office availability, compared with those located in the Asia Pacific region, where offices are expected to be among the smallest in the world. This is the overall trend that was outlined by the Savills Future Office Availability Index.
The index from Savills examines trends in office use and how they relate to forecast economic growth as well as demographics, pipelines for development as well as the number of green office space.
In Singapore there is a rising number of workers are returning the workplace, led by banks and finance. Businesses that originate from China, Japan, and Korea are also establishing places in the city-state. However, Savills says that technology companies continue to adopt flexible work policies.
The office space in Singapore will be awash with hybrid structures as companies compete to attract millennial and Gen Z employees who appreciate working from home, and who want to reduce the cost of renting according to Alan Cheong, executive director of Savills research and consulting.
“While office space in the majority of developed economies is subject to a surplus of supply in the near future, Singapore remains a relatively restricted market because of an absence of new space that offsets the anticipated reduction in demand as firms adopt hybrid models of work”.
The office space in Singapore was steady from 2020-2022. In this year, despite an growth of 1.9 million sq feet in Net Lettable Area (NLA) of space that is being added approximately 1.26 million square feet are due to one initiative, IOI Central Boulevard. Between 2024 and 2028 the anticipated office supply will increase to 3,196,000 sq feet NLA in accordance with the research of Savill.
Although the post-pandemic environment has resulted in a global review of office requirements, results aren’t exactly universal, according to Savills World Research associate Kelcie Sellers.
In the US important cities like San Francisco, New York and Los Angeles have a higher likelihood of experiencing increased availability of office space. For instance, before the Covid era, San Francisco had one of the lowest rates of office availability within the US at 9.5%. With the current economic climate it is estimated that 30% of the office space is either empty or set to be returned to the market within the coming year, which is the highest availability rate in 30 years.
“Singapore’s office market could buck the trends seen in the US in the sense that local authorities are able to manage the supply of land that is available for office buildings of a large scale,” says Savills Singapore CEO Marcus Loo. “The story (of this local market for office space) will be based on the limited supply of land and the rise in secondary stocks”.