Apac Office Occupancy Climbs 88 1Q2024 Beating Europe And North America Savills

Savills reports that office occupancy rates in Apac have seen a strong recovery in the first quarter of 2024, reaching an average of 88%. This is a significant improvement compared to the same period last year when the region’s average occupancy rate stood at 84%.

The performance of the Apac office market has surpassed that of Europe (59%) and North America (53%), according to a market report by Savills. This discrepancy in occupancy rates can be attributed to several factors, including cultural and social norms, housing costs, and commuting expenses between the regions.

According to Simon Raper, head of workplace strategy for Apac and Singapore at Savills, the need for flexibility in office spaces is vital due to variations in cultural nuances across countries within the same organisation. This is particularly evident in the US, where longer commute times have led to lower office occupancy rates as more workers have moved to affordable areas outside of cities during the pandemic. San Francisco and Los Angeles, for instance, have recorded occupancy rates below 50% in 1Q2024.

In contrast, countries in Apac with high rates of intergenerational living and smaller homes, such as Hong Kong and China, have seen a higher demand for office spaces. In Japan, traditional working models coexist with flexible arrangements due to high commuting costs, and younger generations are embracing this flexibility.

The office occupancy rate in Singapore remains robust, with an average of 94% in the first three months of this year. Alan Cheong, executive director of research & consultancy at Savills Singapore, expects this trend to continue for the foreseeable future. However, some companies may adopt hybrid and flexible workplace solutions to optimize space usage, which may result in a smaller office footprint.

Rewritten:

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Despite this, Cheong notes that the average supply of new Grade A office buildings in Singapore from 2024 to 2027 will be around 660,000 sq ft, slightly below the 10-year average of 696,000 sq ft (2014 to 2023). Older office buildings or Grade B offices may see a decline in occupancy rates as newer buildings come on stream. In such cases, extensive refurbishment or redevelopment may be necessary to remain competitive in the market.