Flexible workspaces can help finance sector save costs

Colliers International believes the finance sector can reduce their real estate costs by turning to flexible workspaces, which accounted for two to five percent of Grade A office space in Tokyo, Hong Kong, Shanghai and Singapore in 2018.

This comes as rental expenses and property repair, maintenance and related expenses, made up five percent to 14 percent of the finance sector’s operating costs, reported Singapore Business Review.

The biggest tenant within the region’s central business district, the sector has been facing pressures which include persistently low interest rates, technological change such as the rise of new payment systems, as well as a high regulatory and compliance burden.

Adopting a flexible workspace will help the sector face the volatility of future headcount needs. Big Asian banks with consumer and small business operations may cut staff and branch numbers by 20 to 35 percent in the next five year due to shifts to automation and online service.

Colliers also recommended the use of cloud-based technology to reduce the space and resources needed to run tech infrastructure.

Meanwhile, the low interest rates have made owning buildings cheaper for companies instead of leasing. It has been noted that large financial occupiers tend to own 30 percent of its occupied space.

Source: 13 September 2019