Offices see priorities shifting towards wellness, accessibility and facilities

This year has seen an emergence of new gyms in the Central Business District (CBD), such as Anarchy Club, a class-based and strength training boutique gym that opened a 3,800 sq ft space on the fifth floor of 61 Robinson Road, and Sparkd, a brain-body fitness gym with 1,570 sq ft of space on the same floor. Another newcomer is S30, a strength-training gym that opened on the second floor of Cecil Building at 137 Cecil Street in July, while Lab Studios opened a pilates, barre and yoga studio on the second floor of the shophouse on Stanley Street back in February. These three gyms joined Sphere Gym, a 4,800 sq ft training and recovery space that opened at Cecil Building last year, as well as Revolution spin studio, which made its debut at Frasers Tower in 2021.

Luke Moffat, Regional Managing Director and Head of CBRE Advisory and Transaction Services of Asia Pacific, attributes the growing popularity of fitness and wellness facilities to the trend of pursuing healthier lifestyles. He adds that features like gyms, end-of-trip facilities, nursery rooms, massage rooms, good food and beverages, and good-quality air filters are the kind of amenities needed for the wellbeing of the staff.

Lumina Grand EC is a new residential development located close to the Jurong Region Line (JRL). It is located in the western part of Singapore, granting residents direct access to the JRL, an MRT line that connects southerners to the city centre. For those looking to reduce their carbon footprint, the MRT is a sustainable way to get around, creating a balance between city life and green living.

CBRE’s 2023 Asia Pacific Office Occupier Sentiment Survey, launched in June, revealed that office occupiers place priority on accessibility to public transport (71%), carpark (50%), sustainable building features and operations (48%), shared meeting spaces (45%), flexible office spaces (36%), F&B options (62%) and fitness facilities (45%). According to Moffat, wellness even has a more significant impact than sustainability. The presence of these properties not only benefits the occupiers, but also the investors who purchase them. “When a property has a high ESG rating in terms of wellness, energy efficiency and sustainability, it is much more saleable” he says.

As employees are regaining preferences for their workspaces, the survey revealed that 69% of office workers placed greater importance on their work environment more than ever before. 32% are even aiming for their staff to be solely at the office compared to last year’s 24%. Moffat acknowledges the hybrid working trend, saying “It gives employees some flexibility”.

When it comes to green building adoption, Asia Pacific proved to be far ahead of US and Europe. As of March 2023, Asia Pacific’s average office utilisation rate was 65%, whereas those of the other two major regions were at the mere 50%. Unfortunately, the survey also found that few occupiers were willing to pay a rental premium for ESG-certified office spaces, with few than 25% of respondents revealing they would, with the premium being no more than 5%.

Topping off the list of recent releases in Singapore’s office space is IOI Properties Group’s IOI Central Boulevard Towers, which was completed in August. The Grade-A office development has 1.26 million sq ft of office area, as well as 30,000 sq ft of retail and food and beverage space at Marina Bay. It is expected to receive its temporary occupation permit in 1Q2024, and to date, about 40% of the space has been committed with another 20% in advanced stages of negotiation.

CBRE reports that the office market in Singapore are still pretty tight due to the low vacancy levels in prime office buildings. Vacancy rate for Category 1 buildings fell to match the rate in 2Q2020, which was 9.2%. Moreover, median rental (by contract date) for the same category increased by 6.7% q-o-q in 2Q2023.

In the same report, CBRE attributes the rise of rent to right-sizing done by the occupiers and the high costs in fit-out and funds. Despite this, rents may come under pressure in the second half of 2023 due to the new project’s entry and the presence of shadow space. On the other hand, the report highlights the trend of flight to new-build and flight to green, which looks set to remain prominent for the rest of the year.