Workspace leasing to likely increase in coming years

With the shifting work landscape, Colliers Philippines predicts a boost in the demand for flexible workspaces in the coming years.

Flexible workspaces have become crucial for a lot of companies and individuals as businesses move towards a hybrid work model, a reason why demand in workspace leasing will likely increase in the coming years, according to Colliers Philippines.

Joey Bondoc, Research Director at Colliers Philippines, said that co-working spaces or flexible workspaces are gaining traction not just for their adaptability but also for the amenities they offer, such as reliable internet and office supplies.

“These flexible co-working spaces provide reliable, very good internet connection and other services,” he said, “In fact, we have also seen some multinational corporations leasing an entire floor of co-working serviced offices because they have been implementing hybrid work arrangements.”

Bondoc said that this approach provides businesses the flexibility to adjust their operations based on future requirements and market conditions.

He mentioned that during the pandemic, vacancy rates in co-working spaces hit a high of 40%, but it immediately dropped again post-pandemic.

“So the normal tendency is that while we see vacancy declining and as more companies demand these co-working spaces, as they integrate these flexible working spaces into their real estate strategies, the only tendency is for these lease rates to increase moving forward,” he explained.

Highlighting the long-term potential of co-working spaces, Bondoc believes that developers should prioritize integrating these innovative work solutions as co-working spaces offer the perfect bridge for many companies juggling between traditional office setups and remote work.

“We believe that innovative features such as co-working spaces will be crucial in the recovery of the office market,” he said, “In fact, some residential towers condominiums have allowed co-working spaces within their facilities, because overall, they want to capture greater interest from investors, because they also see a lot of investors looking for these facilities.”

Bondoc said that the wave of co-working spaces is setting the stage for a potential boom in workspace leasing in the years to come.

“We still see a great interest in coworking service offices, flexible workspace, that's why offering these innovative amenities facilities should continue. Because the demand for this will only likely rise moving forward because it provides greater flexibility and mobility for a lot of employees,” he said.