Recently, I found myself in a networking session which featured a guest speaker from Shopify, the online retail web host based in Canada that has been simplifying the way new online merchants run their operations. The audience comprised a mix of entrepreneurs and budding entrepreneurs in the e-commerce field, and who were seen constantly exchanging ideas and talking about their latest online businesses. Through interaction with some of the audience, it appears that while the Singapore government has created a conducive business environment, running a start-up comes at a hefty price, due largely to a lack of small-sized office space in the local office market.
The Singapore office landscape is tailored predominantly to medium-to-large space occupiers, while small firms are typically left to operate out of shop-houses or old office developments. The strict rules that require companies to occupy space that is only zoned for commercial use have also made the search for affordable small-sized office space more difficult.
Fortunately the private market appears to be taking the lead in slowly filling the void in the small-office supply through the creation of serviced offices. While serviced offices are not a new concept, variations of them have begun to sprout up in our local office areas. The general idea behind serviced offices is straightforward: an established serviced office operator takes up space within a commercial development, partitions the space into meeting rooms and private offices and then adds a team of support staff to service the eventual tenants. Small businesses then choose from a suite of services – at different price options – to suit their needs, ranging from having just a business address with basic mail management service to a full service virtual office that includes the use of a private workstation and meeting rooms. These serviced offices are typically located within the CBD, catering mainly to professional services firms which have a preference for prestigious business addresses and a central location.
An alternative form of serviced offices has also appeared in order to cater to firms that do not require a prime location and have limited budgets. Better known as co-working space, their operators also offer packages similar to those in traditional serviced offices. However, co-working space tends to be in a more informal setting and the occupiers more diverse. For individuals, co-working space offers shared workstations in an open-office area on a first-come-first-served basis. In addition to being a cheaper alternative for cost-conscious entrepreneurs, the open-office concept enables entrepreneurs from different backgrounds to share ideas.
While the creation of serviced offices will partially alleviate the space demand of small or start-up businesses, they still do not offer a sustainable solution to the shortage of small-office space. Nevertheless, thanks to a slew of government support to encourage innovative ideas and entrepreneurship such as the ACE Startups Grant and Spring Singapore’s Startup Enterprise Development Scheme, more private players could seek to capitalise on the potential demand by creating similar small-office concepts, albeit offering a short-term solution to the space shortage.
More on 'Office' in 'Singapore'
- Incentivising change: spotlight on Singapore’s CBD and OrchardApril 15, 2024
- Cautious optimism for Singapore occupier market in 2024January 2, 2024
- The renewed focus on Singapore’s office investment marketSeptember 4, 2023
- Opportunities in Singapore’s decentralised officesJune 5, 2023
- Singapore property market watch 2023March 1, 2023
