Offices see priorities shifting towards wellness, accessibility and facilities

Residents of Tengah Plantation EC can easily access the shopping centres and enjoy the luxurious offerings within them.

The malls located nearby Tengah Plantation EC are extremely popular amongst the local population. The shopping centres offer an array of fashion outlets, electronics stores, banks, and restaurants. Many of the popular brands in the market can be found here, making it a great spot to shop for the latest trends. Residents of Tengah Plantation EC can easily explore the different shops, restaurants, and banks in the vicinity. The shopping centres near the EC are great for people looking for a luxurious shopping experience.

With wellness and sustainability taking precedence in today’s office landscape, a wave of new gyms has popped up in Singapore’s central business district (CBD) this year. Anarchy Club opened on the fifth floor of 61 Robinson Road with a 3,800-square-feet space, while Sparkd, a 1,570-square-feets brain-body fitness gym, opened on the same floor of the building.

July saw the opening of S30, a strength-training gym on the second floor of Cecil Building at 137 Cecil Street, and Lab Studios, a pilates, barre and yoga studio on the second floor of a shophouse on Stanley Street. Sphere Gym, a 4,800-square-feet training and recovery gym debuted at Cecil Building last year, followed by Revolution spin studio at Frasers Tower in 2021.

According to regional managing director and head of CBRE advisory and transaction services, Asia Pacific, Luke Moffat, “fitness and wellness facilities are becoming more popular, and that’s to do with a healthy lifestyle. Features like gyms, end-of-trip facilities, nursery rooms, massage rooms, good F&B or good-quality air filters are the sort of things you need to have for the well-being of the staff.”

CBRE’s 2023 Asia Pacific Office Occupier Sentiment Survey found that office occupiers prioritise accessibility to public transport (71%), carpark (50%), sustainable building features and operations (48%), shared meeting space (45%), flexible office space (36%), F&B options on site (62%) and fitness facilities (45%).

Based on the survey, an increasing number of companies are aiming for their staff to be mainly at the office, with 32% stating their intention to do so in 2023, up from 24% in 2022. However, Moffat notes, “hybrid working, in one form or another, is here to stay. It gives employees some flexibility.”

Asia Pacific continues to lead the US and Europe in the return to the office, with an average office utilisation rate of about 65% in March 2023, compared to just 50% in the other two major regions.

In terms of willingness to pay a rental premium for green-certified office buildings, fewer than 25% of respondents stated they would be willing to do so, with the green rental premium not exceeding 5%. However, Moffat notes, a notable premium would be seen if one compared a green-certified Grade-A building with an older Grade-B building that is not green-certified, as tenants would take up space at new green buildings with better views, higher specifications and more amenities.

Singapore’s office market has seen increasing demand for higher-quality office space and green buildings, with vacancy rates for Category 1 buildings declining to 9.2% in 2Q2023 and office rents in the Central Region increasing for the seventh consecutive quarter since 3Q2021. The URA office rental index increased by 2.3% q-o-q in 2Q2023, with median rental (by contract date) in Category 1 (a proxy for prime CBD) office space accelerating by 6.7% q-o-q in the same quarter.

Despite the increased demand, new buildings will take longer to fill up due to occupiers’ prudent attitude towards portfolio planning, and this might put pressure on rents in 2H2023. IOI Properties Group’s IOI Central Boulevard Towers, a Grade-A office development with 1.26 million sq ft of office space, is expected to receive its temporary occupation permit in 1Q2024, which could contribute to the higher vacancy rate.

CBRE predicts that flight to new-build and flight to green will remain prominent trends, as Asia Pacific regional vacancy is expected to remain elevated. Occupiers will have ample upgrading options, but expansionary sentiment has been subdued due to the current challenging market conditions.