Demand for Flexible Workspace Across Asia Pacific Remains Resilient Despite Tough Market Conditions

Monday, April 22 , 2024

The Instant Group’s recent APAC Flex Space Market Report reveals that demand for flexible workspaces across the Asia Pacific region has increased by 13% over the past five years, despite a subdued market throughout 2023 amidst tough business conditions.

In our latest report, we explore the latest trends in supply, demand, pricing, and client expectations around flexible workspace for 2024 and beyond in the region. Below is a sneak peek. Read the full report here: 2024 APAC Flexible Workspace Market Review. 

Auckland and Seoul experience strongest demand growth in APAC

Demand variations across cities underscores the diverse regional dynamics at play as the flexible workspace sector matures, evolves and adapts to the new working world.

Some cities such as Auckland and Seoul have experienced a healthy recovery, achieving a compound annual demand growth rate (CAGR) of 22% and 20% respectively over the last five years. Other growth markets include Shanghai, Jakarta and Mumbai, with demand for flexible workspace seeing a CAGR of 9%, 8% and 6% over five years. Hong Kong, Sydney and Melbourne however have been severely impacted by lower-than-expected demand levels, with a CAGR of -8%, -7% and -7% respectively. 

Desk rates across APAC decline to retain clients

To attract and retain clients in a highly competitive and challenging economic market, operators are having to reduce desk rates.

Across the APAC region in 2023, Kuala Lumpur experienced the biggest drop in rates year on year, with a flex desk costing an average of 365 USD per month, down by 32% compared to 2022. Jakarta’s desk rates dropped by 16% in 2023 compared to 2022 to an average of 504 USD per month, while Mumbai and Bangalore both saw rates decline by 9% year on year, with desks costing an average of 411 USD and 349 USD per month respectively.

APAC cities bucking this trend include Metro Manila, Singapore and Sydney who all saw desk rates increase in 2023 - by 15%, 14% and 2% respectively year on year (2023 vs 2022). Tokyo’s desk rates remained flat year on year, however the buzzing city is the most expensive city for a flexible desk across the APAC region, with rates sitting at an average of 792 USD per month.  

Supply of flexible workspace growing slowly across APAC

The flexible workspace market has grown by just 2% over the past five years across the Asia Pacific region, with various markets remaining stagnant. Many operators are focusing on increasing profitability and occupancy rather than expansions due to higher operating costs and slower demand in some markets.

Cities in APAC leading the supply growth include Tokyo, with 4% supply growth over the last five years, followed by Seoul and Kuala Lumpur at 3% and 2% growth respectively. 

Despite the slower growth, results from The Instant Group’s Future of Flex Survey show that this is expected to change in 2024 with 67% of operators revealing that they expect to increase their footprint over the next two years.  

Read the full APAC Flex Space Market Report here 

To learn more about how The Instant Group is supporting workspace providers, contact our team today: [email protected] 

Note: Supply and demand figures in this article are based off of compound annual growth rate (CAGR) over the last five years.

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