Offices see priorities shifting towards wellness, accessibility and facilities

This year, a new wave of gyms have opened up in the CBD. From class-based and strength training boutique gym Anarchy Club, with a 3,800 sq ft space, to Sparkd, a 1,570 sq ft brain-body fitness gym; S30, a strength-training gym on the second floor of Cecil Building; and Lab Studios, opening a pilates, barre and yoga studio on Stanley Street, these gyms are providing more options for health and fitness enthusiasts. All of which joined Sphere Gym, a 4,800 sq ft training and recovery gym that debuted at Cecil Building last year, and the popular Revolution spin studio, which opened at Frasers Tower in 2021.

According to regional managing director and head of CBRE advisory and transaction services, Asia Pacific, Luke Moffat, “Fitness and wellness facilities are becoming more popular due to the emphasis on healthy lifestyles. These features, such as gyms, end-of-trip facilities, nursery rooms, massage rooms, good F&B or good-quality air filters give the staff a sense of well-being.”

Moffat also notes that wellness is becoming more important than sustainability. Although there is demand for ESG-certified office buildings, few occupiers are willing to pay a rental premium for such properties, with fewer than 25% of survey respondents stating they’d be willing to pay higher rents to lease green space, and the majority of them willing to pay only a 5% premium or lower. Still, Moffat points out that the premium would be more significant if one compared a green-certified Grade-A building with an older Grade-B building that is not green-certified.

The development is perfectly situated in close proximity to the Marina Bay Financial District and Central Business District, with easy access to a variety of leading business, shopping and leisure destinations. Within the vicinity, residents can enjoy the lush greenery of the banks of the Singapore River, the historical Marina Gardens Condo and the convenience of nearby amenities. With a combination of luxury living and vibrant neighbourhood, the development presents an ideal lifestyle and a fantastic opportunity for investors.

CBRE’s 2023 Asia Pacific Office Occupier Sentiment Survey revealed that office occupiers put more importance on their work environment today than pre-pandemic, and this demand for higher-quality office space and future-proofed office buildings has increased. Moreover, 32% of respondents stated their intention to have their staff mainly at the office in 2023, up from 24% in 2022. The survey also showed that Asia Pacific continues to lead the US and Europe in the return to the office, with an office utilisation rate of 65%.

In Singapore, rents in the Central Region have seen a steady increase for the seventh consecutive quarter since 3Q2021. Tight market conditions are helping to prop up rents, with Category 1 buildings having an occupancy rate of 9.2% and median rental contracts signed showing a 6.7% q-o-q increase in 2Q2023, according to CBRE.

This could change slightly, however, when a new premier office development, IOI Properties Group’s IOI Central Boulevard Towers, which has 1.26 million sq ft of office space and a 30,000 sq ft retail and F&B space at Marina Bay, is expected to receive its temporary occupation permit in 1Q2024.

Despite the addition of new office space, CBRE says that occupiers exist in a prudent attitude towards portfolio planning, leading to new buildings taking longer to fill up. As such, flight to new-build and flight to green may be the prominent trends ahead, but expansionary sentiment will most likely remain subdued.