Supply of flex centres in the regions key cities has grown consistently above 15% with the only inhibitor to growth being a lack of available space for expansion.
There are now an estimated 8,600 centres across the region providing a flex option within their space – an influx which has enabled rapid expansion and growth within a short period of time – leading to 6 of the largest global markets for flexible office space being in Asia-Pacific.
Key Cities of Growth
Hong Kong currently has the largest supply of space within the region with more than 340 flex centres identified within the city. Despite being a mature market, growth levels continue to remain high with an increase of 19% increase in supply over the last year, almost double the growth of London.
Other high growth cities include Bangalore, Singapore, and Melbourne which also saw a 19%+ increase in the supply of new centres.
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What are occupiers doing?
Instant’s data shows that the market is seeing significant occupier demand thus far to more than match this additional supply of space, despite the rapid rate of growth. This year has seen the number of individuals placed into flexible locations across the APAC region increase by over 40%, when compared to the previous 12 months..
Our data would lead us to suggest that, flex space will continue to develop in new, high growth markets, as it seeks to expand beyond the APAC region’s key financial hubs. The expansion of leading operators into tier 2 cities in the region such as Jakarta and Manila will become a dominant theme over the next five years. As businesses face increasing challenges globally, many are turning to flexible workspace as a low-risk, lower-cost alternative to traditional office space.
Businesses are quickly realising that flex provides a versatile and agile workspace in very central locations. This growth in demand across the APAC region has encouraged many operators to expand rapidly.
An investors’ market
The flexible industry in Asia-Pacific remains heavily weighted towards independent and localised providers, however, the industry has seen larger operators seeking to expand quickly with aggressive growth plans.
WeWork has expanded quickly and has indicated that its growth is not likely to slow during the next 12 months as companies like Microsoft and Facebook have taken large numbers of desks within its centres across the region.
Ucommune has also aggressively expanded throughout the region in a bid to compete with WeWork’s growth across the region, suggested they may follow the ‘Powered by We’ program.
As investments in more traditional real estate sectors are providing lower returns across APAC, investors are increasingly looking toward more niche, fast-growing areas, to maintain higher levels of return. A recent survey of investors found that of these specialised areas in real estate, 14% plan to invest in flexible office businesses, giving a very clear indication of the interest in this market at present and a key driver in the flex space revolution across the region.
A full overview
The Instant Group’s latest market report delves into the changing dynamics within the fastest growing flex space market in the world.
For the full city breakdown report, please contact our research team to receive a complete overview of the entire region with industry-leading data surrounding the key pockets of growth.
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