Less than 0.5% of SG office stock needs annual repurposing

This reflects the country's effective office stock utilisation.

Only 0.2% to 0.5% of Singapore’s office stock needs to be repurposed annually compared to global averages aiming for 0.7% to 0.9% by 2033, according to Savills' analysis.

“Singapore’s lower requirements mean that office stock has been utilised more effectively that there is not much excess stock which needs to be repurposed,” the report said.

Repurposing involves converting office buildings into residential, retail, leisure, or educational spaces, responding to evolving post-pandemic demands for mixed-use developments. Vincent Lau, executive director of project management at Savills Singapore, highlighted the efficiency of Singapore's office utilisation, indicating that excess stock requiring repurposing is minimal.

Conversely, cities like Sydney also demonstrate low repurposing needs, ranging from 0.3% to 0.7%. In contrast, New York faces more significant challenges, with between 1.1% and 1.3% of its office space needing repurposing annually to achieve market balance by 2033.

The economic incentives for repurposing are evident, with potential for higher rents driving landlords to retrofit office spaces to meet new standards. However, challenges exist for owners of lower-grade stock where costs may outweigh benefits.

“Efficiency is key, especially given high office rental costs, resulting in tenants increasingly opting to reduce the size of their offices by boosting space efficiency,” he said. 

“Landlords and tenants aiming to enhance their spaces and embrace sustainability should recognise that green initiatives now extend beyond simple office fitouts,” added Lau.

The report said government support is crucial in facilitating these transitions. 

In Singapore, initiatives like the Green Plan 2030 incentivise retrofitting older buildings to enhance sustainability and revitalize urban areas. Public-sector policies on land usage and financial incentives for developers also play key roles in injecting vibrancy into urban centers during non-working hours.

“Whether it’s the greening of older buildings or the repurposing of offices, the role of the government is key in achieving those aims,” said Alan Cheong, executive director, research and  onsultancy at Savills Singapore.

“Singapore has offered incentives to certain areas with the hope that older buildings in those locations may get repurposed or redeveloped to mixed uses, thereby injecting more vibrancy to the CBD on both weekends and in the evenings.”