The proportion of flex space in Grade A office stock in the Asia Pacific region rose from 3.1% in 3Q2022 to 3.5% in 1Q2023. This increase reflects the strong demand from flex space operators seeking to upgrade their centres to more Grade A buildings, according to a sector report by CBRE.With the growing uncertainty amid the pandemic, there is increased focus on cost management and portfolio flexibility, driving occupier demand for flex space.CBRE found that tech firms are the region’s largest occupiers of flex office space this year, and based on a survey of occupiers in the region, more than half of the respondents said that they believe their proportion of flexible office space in their portfolios is under-allocated, and they intend to increase its use in the coming months.Capital expenditure concerns are driving a preference for dedicated workspaces, as well as a greater demand for event spaces and office access passes. On-demand workstation solutions are also expected to rise this year.Regionally, as of March, the total volume of flexible office workspace in the Asia Pacific had reached 87 million sq ft, up 6% from September 2022.In Singapore, the proportion of flex office penetration in the overall office market is around 5.4%, or 4 million sq ft.Flex office spaces had penetrated 4% of the total regional office supply by the end of 1Q2023, and the top three occupiers were found to be technology companies (35%), business services (16%), and finance-related companies (12%).

The Asia Pacific region’s flexible office workspace saw an increase of 6% in total volume from September 2022 to March of this year. This is according to a sector report by CBRE, which found that across the region, 4% of the total office supply had been taken up by flexible office spaces as of the first quarter of 2023.

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The demand for flex space is growing, driving the proportion of flex spaces in Grade A office stock to increase as well. From 3.1% in the third quarter of 2022, the percentage grew to 3.5% in the first quarter of 2023. With the current economic uncertainty, the importance of portfolio flexibility and cost management is further strengthened, and this has resulted in a greater demand for flex space.

In the Asia Pacific region, the biggest occupiers of flex office space are technology companies (35%), followed by business services (16%), and finance-related companies (12%). Singapore’s own flex office penetration in the overall office market has reached 5.4%, and this translates to around 4 million sq ft.

When it comes to the use of flexible office space, more than half of the respondents from a survey of regional occupiers think that the proportion of such spaces in their portfolios is under-allocated. Therefore, they intend to increase the use of flexible office space in the future.

Capital expenditure concerns are driving a preference for dedicated workspaces, as well as a stronger demand for event spaces and office access passes. On-demand workstation solutions are expected to become more popular this year too.

Overall, the flex office space sector has been gaining momentum in the Asia Pacific region, and due to the present economic climate, companies are focusing more on cost management and portfolio flexibility, which will further drive occupier demand for flex space.