Asia Pacific Flexible Office Market Continues Growth in First Half of 2024

A recent CBRE study shows that the Asia Pacific (Apac) flexible office market has shown resiliency and ongoing expansion in the first half of 2024. The industry has been able to spread its footprint over the area even if the growth rates in the years following the epidemic have stabilised. Flexible office stock in 20 of the main Apac markets peaked at an amazing 89 million sq ft in June 2024, up 3.9% from December 2023. Now representing 4% of total Apac office stock and 3.2% of total Grade-A office stock, this growth has confirmed the place of flexible space in the entire office market.

Though consistent, the expansion shows a notable change from the fast increase observed in years before the pandemic. From 2020 to 1H2024, the market showed an annualised growth rate of 4%, a notable decline from the 51% annualised growth rate recorded between 2015 and 2019. This slowing down of speed points to the Apac flexible office space market entering a phase of normalised expansion, hence departing from the explosive expansion marked of the pre-Covid-19 era.

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It is becoming clear from regional variances in the flexible office market. Rising to top in the industry with some of the best Apac penetration rates, Singapore is Comprising around 4 million square feet, the flexible office space of the city-state represents 5.4% of all office stock as well as 5.1% of Grade-A office space. Recent expansion has been driven by Indian cities; Delhi and Bangalore especially display rather high numbers. By contrast, cities such Beijing, Guangzhou, and Shenzhen in mainland China have seen a dip in flexible office space penetration—rates falling below 2% in the Grade-A office market.

The post-pandemic environment has forced flexible office space operators to review and change their corporate plans. These days, maximising centre use, turnkey-managed solutions, and income diversification are taking front stage. In order to build more environmentally friendly business models, many operators are also investigating alternate agreement structures incorporating management and capital expenditure contributions from landlords. These changes show how the sector responded to shifting customer expectations and changing market conditions following the worldwide epidemic.

The Apac office market always includes the flexible office sector, which is still growing and changing. With about 3,000 flex space centres spread over the area, the industry’s capacity to adapt and satisfy evolving needs of companies will be absolutely vital in determining its future expansion and success in the varied and vibrant Asia Pacific market.

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