Singapore entrepreneurs warm up to 'renting desks'

Singapore

The explosion of co-working spaces in Singapore is a game changer for entrepreneurs in city-state, one of the most expensive locations in the world to rent traditional office space.

When 34-year-old New Zealander Michaela Anchan decided to launch a career as a freelance writer after five years as a stay-at-home mom, she found working from home both isolating and distracting.

There were few offices in Singapore's rental market that were suitable and fitted her budget,prompting her to shift gears and set up Woolf Works last year - a co-working space targeted at female entrepreneurs and professionals.

"I thought it would appeal to women trying to balance young kids and work, or separate home and work life. I couldn't see anyone catering to that niche, so I talked to a few people and saw there was demand," she told CNBC.

Nine months since its launch, Woolf Works, located in a chic shop house in Singapore's charming Joo Chiat neighborhood, has seen healthy demand, currently running at 50 percent occupancy.

"It was a slow start during the first six months, but now we're getting new members every week. We have a real diverse range of people: everything from writers to company executives, people in F&B, photographers, consultants, graphic designers," Anchan, who was formerly a project manager at a shipping company, said.

"I'm optimistic about prospects from the response so far and I've got plans to open a second space on the other side of town later this year," she said.

Woolf Works is part of a growing trend of co-working spaces in the city-state catering to niche groups of self-employed individuals - from 'momtrepreneurs' to techies and artists.

Co-working and collaboration

Singapore's co-working space market has come a long way since 2009, when its first entrant Hackerspace.SG set up shop, with now 30 outfits located across the island, according to CoWorking Singapore's website.

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There's a lot to be gained from bringing together a group of individuals in the same line of work, says Sheau Chan, the founder of Art Social House - the city's first privately run co-working studio for artists and craftsman.

"While certain businesses that need privacy, art is different. It's more of a self-expression," said Chan, who also allows her tenants to use the premises to host art classes. "Many artists tend to work from home and don't get that external stimulation, which is one of the reasons I set up this space."

Tectonic shift

The explosion of co-working locations is a game changer for entrepreneurs in Singapore - a city ranked as the 14th most expensive in the world to rent office space, according to real estate services firm CBRE .

While renting an exclusive office could run into the thousands of dollars, a desk at a co-working space starts at $200 a month and comes with far fewer overhead costs and more flexible lease conditions.

A traditional office space in the city also typically requires tenants to sign a three-year contract, which is too long for start-ups, said Donald Han, managing director of real estate consultancy Chestertons Singapore.

But even as the co-working market renders the office space "more accessible than ever," Han says it's unlikely to disrupt the industry and bring down rents for now.

"The co-working market is still at an embryonic stage in Singapore," he said, adding that the target market for co-working spaces versus traditional offices is different.

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"Those looking at renting a co-working space would have probably worked out of a library or their home otherwise," he said.

However, "the challenge may come when more co-working centers are established in the central business district (CBD)," he added. At present, there are just three co-working locations in the CBD.

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