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Tenants turning to shared living spaces
Apr 15, 2023
Tenants turning to shared living spaces Singapore
By   shicheng news
  • City News
  • Shared living space
  • serviced flats
  • hotel rentals
  • rising rents
Abstract: As private rentals continue to rise in Singapore, and with limited units available for rent, many tenants are turning to shared living spaces, serviced flats and hotels, creating more business opportunities for shared living space operators.

Estimates released by property websites 99.co and SRX at the end of last month showed that rents for non-landed private homes in Singapore rose by 3.5 per cent in February, up from 1.4 per cent in January, marking the 26th consecutive month of rent increases.


Lim Yong Tian, CEO of Singapore-listed Hsien Loong Group, said rising and high private rents have prompted many tenants to reconsider and explore other accommodation options.


He revealed that the group's cohousing brand Coliwoo was receiving more and more enquiries. Last month, it received up to 1,000 enquiries per week, up from about 800 previously.


"The co-housing business, which originally had an occupancy rate of about 95 per cent, has now risen to an average of between 98 per cent and 100 per cent."


Coliwoo rents out shared living spaces and shared accommodation hotels on an all-inclusive basis, with tenants paying only a fixed price for rent, utilities, maintenance and cleaning services for the duration of their stay, said Lim Long Tian.


"Tenants are not affected by fluctuations in utility prices, which ensures that they can budget more effectively. In contrast, landlords of individual flats or private homes in general may adjust the rent according to their own expectations and requirements."


Apart from Coliwoo, other shared living space players in Singapore include Ascott's lyf, The Assembly Place, which is funded by real estate luminaries such as Mah Sing's president Tan Bee Min and Bona Industrial president Ismail, Hmlet, backed by Sequoia Capital and Japan's Mitsubishi Estate, and Weave Living.


A report on shared living spaces released by Cushman & Wakefield in January this year noted that the current supply of the shared living space sector in Singapore is expected to be below 10,000 rooms with an occupancy rate of at least 80 per cent.


In an interview, Savills' Head of Research, Teo Min Jang, said that shared living spaces mainly cater to single people or couples. The rent for an entire private flat is now beyond the budget of some people and this group will choose to move to a shared living space.


Currently, the monthly rent for a studio unit in District 15 is around S$4,000 (about RM13,360), while the rent for a shared living space is lower, ranging from S$2,000 (about RM6,680) to S$2,500 (about RM8,350) per month.

 Tenants turning to shared living spaces

He believes that shared living space operators are the main beneficiaries of the high rents.


While the minimum rental period required for serviced flats in Singapore is seven days, the rental period for shared living spaces varies from company to company, with some lasting several weeks and others just a few days.


Teo Min Jang noted that serviced flat and hotel operators have also benefited from the trend of rising private rentals, as the low stock of private units available for rent has forced more expatriate tenants to stay in serviced flats and hotels for the time being.


"Demand outstripping supply is driving up private rents and every unit is highly sought after. In the fourth quarter of last year, the vacancy rate for non-landed private housing in Singapore reached 5.6 per cent, which is at the low end of the range of levels over the past 22 years, meaning that there is a low inventory of private housing units available for rent."


He said those choosing serviced flats and hotels were tenants who were staying in Singapore for a few months or a few seasons. "They are foreigners who come to Singapore for training or to apply specific skills to Singapore land projects.


"Serviced flat and hotel rates are much higher than private residential units or shared living spaces. However, companies are willing to pay more to provide serviced flats and hotel accommodation for these employees due to the flexibility of their leases, especially when there is uncertainty about how long they will stay in Singapore."


Cushman & Wakefield's Head of Research, Wong Hin Yeung, has also noticed that some tenants are turning to shared living spaces. These units are smaller in size, so the cost of rent in absolute terms may be lower. A small shared living space is between 120 and 200 square feet in size.


"More flexible leases are also a reason for tenants to move to shared living spaces. The minimum lease requirement for private homes is three months, while shared living spaces, serviced flats and hotels have shorter leases."

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Tenants turning to shared living spaces