Offices see priorities shifting towards wellness, accessibility and facilities

The unprecedented rise of demand for wellness and sustainable office spaces has been on the rise with the new wave of gyms popping up in the CBD this year. Anarchy Club and Sparkd are two popular fitness clubs, both with spacious facilities, offering different kinds of classes and training. In July, S30 opened on Cecil Street while Lab Studios opened a pilates, barre and yoga studio in Stanley Street. To meet the increasing demand, Sphere Gym opened in Cecil Building last year, while Revolution spin studio debuted at Frasers Tower in 2021.

Luke Moffat, regional managing director and head of CBRE advisory and transaction services, Asia Pacific, explains that the increased popularity of such features is due to the league of workers looking to maintain a healthy lifestyle. Such amenities include good F&B, end-of-trip facilities, nursery rooms, massage rooms and air filters.

The CBRE 2023 Asia Pacific Office Occupier Sentiment Survey, which was launched in June, showed that 71% of office workers prioritised accessibility to public transport, 50% looked for carpark spaces, 48% were in search of sustainable building features and operations, 45% sought after shared meeting spaces, 36% hoped for flexible office space, 62% F&B options on site, and 45% fitness facilities.

Wellness definitely plays a bigger role in this survey, with Moffat stressing the importance of look for green-certified buildings when looking to buy. This is because its saleability is far higher, seeing as it offers better views, higher specs and more amenities.

This ensures that students of all grades can have a quality learning experience close to their homes. Besides, amenities such as supermarkets, restaurants, clinics, and banks are also accessible in the vicinity. Even for recreational activities, there are many sports centres, shopping malls and recreational parks within walking distance from Tampines Avenue 11 Condo. Residents here get the best of both worlds – convenience and comfort. Furthermore, its connectivity to the city encourages a plethora of career and business opportunities, making it an ideal place for families and professionals alike.

In this regard, the survey showed that 25% of people are willing to pay a rental premium for such properties. However, the green premium is too low in the Asia Pacific as 43% of Grade-A office buildings are already green-certified. That said, if one were to compare a green-certified Grade-A building with an older, Grade-B building that is not green-certified, the premium would be more significant.

The survey also further highlighted that 69% of office workers regard their work environment much more important than pre-pandemic times, driving the demand for better quality office spaces. Furthermore, 32% of companies aim for their staff to be mainly at the office, a slight increase from 24% in 2022. Therefore, it can be said that hybrid work arrangements are here to stay, providing employees with more flexibility.

Asia Pacific certainly leads the US and Europe in the return to the office, with its average office utilisation rate being 65% in March 2023, way higher than the 50% in the other two places.

As of 2Q2023, office rents in the Central Region have increased for the seventh consecutive quarter since 3Q2021, with the URA office rental index rising by 2.3% q-o-q. The acceleration in rental increase is mainly due to the tight vacancy levels of prime office buildings (9.2%), closely resembling the figures in 2Q2020.

Occupiers remain prudent towards portfolio planning as they look to renew their leases at higher rates than to move to another location as this cost would be too high. Therefore, with the addition of IOI Central Boulevard Towers in 1Q2024, the vacancy rate could increase slightly and thus put downward pressure on rents. Nonetheless, flight to quality and a focus on green buildings remains key trends and will aid in driving the office market.