When coworking spaces first entered Singapore’s office space scene, they were seen as temporary office spaces for individuals and startups to bootstrap and get their businesses rolling without the commitment of a fixed lease office space.
For business owners, signing on to a long lease was a major financial gamble, leading companies to opt instead for flexible solutions even before the pandemic. Now, operators in Singapore see more multi-national corporations (MNCs) downsizing their main office, opting to put some, or all, of their employees in coworking spaces.
Experts and coworking spaces told TODAY that more MNCs are jumping onto the “hub-and-spoke” model, where they have a smaller, traditionally leased headquarters and coworking spaces.
This is in part due to larger companies adopting hybrid work arrangements, allowing employees to work from both the office and home.
Businesses in Singapore opt for coworking post-pandemic
Willis Towers Watson (WTW), a British-American risk management insurance company, provides a prime example of a company in Singapore that shifted away from a fixed office. When surveying their employees, 97% of the 265 workers the company asked said they’d prefer a hybrid work arrangement.
Choo Oi San, the leader of WTW Singapore, says that’s why the company decided to end its lease with One Raffles Quay and move instead to a contract with WeWork. Choo told TODAY that some of Willis Towers Watson’s offices in North America are shifting to a coworking model as well.
“The advantage of using such a (coworking) model is that it provides us with the ability and flexibility to adapt to changing business needs quickly without a big upfront investment,” said Choo. “The membership to use the space is also shorter and we can scale up easily and quickly if we need additional space within the central business district.”
The first phase of a three-part transition for WTW Singapore begins in July 2022. WTW is moving into a WeWork office building at 21 Collyer Quay, a space made up of 30% meeting rooms intended for collaborative thinking, plus a dedicated floor for up to 100 desks. WTW will be one of many major MNCs operating out of this particular WeWork location; the coworking provider estimates that 80% of its occupants will be large corporations.
Interestingly, WeWork has seen a massive increase in members who have over 500 full-time employees requesting their spaces post-pandemic. Companies of this scale now make up half of WeWork’s members in Singapore.
Coworking operators like JustCo see increased demand
Other coworking operators in Singapore are witnessing the same trend. JustCo, a network that provides coworking workspaces for both companies and individuals, also says large enterprises (companies with over 1,000 employees) have been using its services more and more.
JustCo is headquartered out of Singapore, and the region has seen massive growth, according to Vice President and Head of JustCo Singapore and Korea, Michael Sim.
“During the pandemic, we noticed that hot desking became more popular as individuals sought a ‘third space’ outside of their home and regular office,” said Sim.
MNCs occupy an overage of 85 of JustCo’s workstations in the first quarter of 2022, compared with 73 memberships in the last quarter of 2021. One of the larger draws for JustCo members is that employees can choose which of 18 coworking spaces they’d like to visit, cutting down commute time by expanding their options.
Tricia Song, head of research at CBRE, said that some MNCs had been moving into coworking spaces before Covid-19 struck, but the pandemic had slowed this trend with most adopting work-from-home arrangements.
However, Song believes that the trend should pick up again as companies adopt hybrid work arrangements, which spell cost savings if coworking spaces are adopted.
When asked what implications this will have on the traditional leased market, Song noted that most coworking operators also lease space from landlords or have partnered with them.
“We expect the growth of the coworking market to be symbiotic with the office space market and the take-up of coworking spaces post-pandemic bodes well for the office space market,” she said.