Recession? Time for a serviced office

CAUGHT in between a sluggish economy and sticky office rents, many business owners are feeling squeezed.

Many are trying to cut costs while looking for new opportunities.

But Regus Group’s country general manager (South-east Asia) William Willems has little doubt that serviced offices – like the ones his firm officially launched last week at One Fullerton – are the answer.

Mr Willems told Today: “Now is the right moment to do business. If you look at the big brands … when do they expand?

“It’s usually in the recessionary times because they have big market share, they are more creative and better managed.”

Pointing out that the two main issues dogging businesses nowadays are economic uncertainty and scarcer credit, he said: “I don’t think a lot of people will take the risk to sign three-year leases. They would probably come to us.

“Everything is there for you to do business. There’s no cash investment and it’s a flexible solution in terms of duration and size.”

By turning to serviced offices – which come with a receptionist service as well as secretarial and information technology support – businesses can save up to 60 per cent of costs, said Mr Willems.

“You only pay for what you use.”

He said: “A lot of people think that the cost of renting an office is only the square foot price but there’s a lot of cost behind this, including IT, telecoms, maintenance, repairs, cleaning and so on.”

As part of its global expansion plans, Regus Group has been opening new centres “every two weeks over the last three years”, said Mr Willems.

Seven years after its last activity here, Regus Group decided in January to lease the space at One Fullerton, investing some US$1.5 million ($2.2 million) to refurnish it into meeting rooms, a business lounge and 325 workstations with “state-of-the-art IT infrastructure”.

Adding on to its existing business centres at Centennial Tower and UOB Plaza, Regus Group’s latest offering, which overlooks Marina Bay, provides some 20,600 square feet of office space.

Businesses can choose from a variety of solutions, including virtual offices in which Regus would manage the phone calls and mail. Users can pay about $990 per month for a shared office space, or $3,000 per month for an exclusive, two-person office.

With 110 centres set up in 40 cities, jetsetting business executives can also tap on Regus Group’s global network.

Still, the timing of the launch might be difficult, what with Singapore slipping into recession and with office rents having peaked.

Some analysts are even predicting an oversupply of office space, especially with the Business and Financial Centre slated to be ready in two years’ time.

Mr Willems is concerned too. Emphasising that Asia “is a very dynamic region despite the recession”, he said: “Strategically, we knew that there is demand in the Singapore market. It’s still a very tight market in terms of availability.”

And despite “all the bad news we see on TV and read in the papers”, inquiry levels in Asia Pacific – which averaged about 2,500 per month between May and September – have remained steady, he said.

“We are doing as many tours, visits and signing as many contracts as we were a year ago,” said Mr Willems, whose optimism for the Singapore market is backed by the strong demand for his company’s newest business centre.

Since it opened for business in August, occupancy rate is already “getting close to” 83 per cent – the average occupancy rate for its serviced offices worldwide for the first six months of the year.

Besides Regus Group, the serviced offices industry here is dominated by a handful of major players including Australia-listed Servcorp, The Executive Centre and City Developments.

Mr Willems said: “I think we are a perfect product for recessionary times.”

Source : Today – 23 Oct 2008

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