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Singapore companies sharing office space to beat rent hikes

08-06-2013 16:33 BJT

By CCTV correspondent Prerna Suri

Singapore -- is drawing more companies as rents dropped in the past year. But rents may climb again -- as new office space supply is expected to be tight in the next three years. That’s why entrepreneurs are trying new ways to bring down office costs.

It looks too cool to be an office. But many have made this place their preferred choice of business. Welcome to the "hub" - a shared office space where business deals are struck over cups of coffee. Upshot and some nice music.

It’s called co working. With office rents rising in Singapore many businesses have realized the advantages of sharing office spaces like these. Apart from the physical benefits of owning your own desk and free wifi connection, there is that other thing which entrepreneurs dream about- the opportunity to network endlessly.

Those were some of the reasons that attracted Daryl. He set up his business in Singapore a few years ago and runs an enterprise which uses technology to bring about social change. Co working for him works as it not only brings down costs, it also allows greater flexibility

"The key benefit is that you’re not paying for dead time. So, realistically we would work from 8-8 but then basically during the day. There’s also sleep time that we/re paying for in rent which we don’t use.and then there’s weekends. And quite often we re not working on the weekends or don’t want to be. So,we’re not covering that dead period whereas if we had our own space we had to pay for that cost plus refurbishment." Daryl, Founder of Newton Circus said.

Here’s how it works. For 600 dollars a month per desk, a company gets free internet, printing facilities, meeting rooms and a space to call their own. It’s not a bad deal considering it’s located in central Singapore, where rents range anywhere from $6000 to $20,000 a month. And experts predict that rents are expected to rise only higher.

"Financial firms between now and going all the way back to 2006 have accounted for half the take up in the new development so literally 5 million of the 10 million have been financial firms. And the important piece within that, 32% within that has been expansion ie net new take up. So the bit that going to drive up rents.if you look at it, the market is has all the ingredients there for a potential uplift in rents." Chiris rchibold, Head of Markets of Jones Lang Lasallf said.

For smaller businesses, office spaces like the hub offer just the right amount of costs. And it’s founder says business is growing

"We started with 30 hubbers in the first month. The revenue was at something like 3000 something dollars.its been 15 months and we’ve had one or two members signing up each day. And even just yesterday we had 4 members signing up and on our best day we had 17." Grace Sai, Founder of The Hub said.

So, while some may think this is just a cool place to meet people. For others, this is the future of how business will be done in one of Asia’s most expensive cities.

 

Editor:James |Source: CCTV.com

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