Looking over a five-year period, technology firms and agile space operators have progressively emerged as the key drivers of office space demand over the years – cumulatively from 8.3 per cent to 34.5 per cent.
Compared to a traditional lease that will bind them to physical premises for a traditional lease term of three years, agile spaces provide these startups with benefits such as lower capital expenditure, greater networking opportunities, and the ability to be working in prime locations at a lower cost.
The growth of these SMEs has fuelled the expansion of agile space market.
Agile space refers to serviced offices and co-working spaces, and companies are increasingly viewing them as part of their workplace strategy in optimising occupancy costs, and not solely as physical work premises.
From 2013 to 2018, the number of agile space locations doubled, while the market size tripled.
While the predominant users of agile space are startups, there are increasingly more large corporates and MNCs embracing it.
Some of these MNCs adopt a workplace strategy called the core flex model, which involves locating a company’s main headquarters within a traditional office space, while taking up a “Flex” portion from an agile space operator – creating scalability in space efficiency.