Why suburban working is a growing trend in Asia

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In a trend accelerated by Covid-19, workers and their employers are embracing non-city centre locations

The suburbs are making a comeback, according to reports from CRE experts and IWG’s own on-the-ground country managers in Asian territories.

“The recent growth of regional and suburban flexspace in Asia isn’t a huge surprise,” says Lars Wittig, IWG Country Manager for the Philippines, Vietnam, Cambodia, Thailand, and South Korea. “The demand for alternative and flexible workspace solutions used to be driven by the employees – something IWG called ‘the workspace revolution’. Today, we’re seeing a much increased demand from employers seeking to facilitate hybrid workforces with multiple office hubs for greater productivity and talent retention. Developers and landlords have also joined this strategic trend.”

Looking specifically at the Philippines, where IWG has 28 centres, he says: “One factor for the shift is the traffic in metropolitan Manila. It’s rated the worst in South East Asia, and the pandemic has led people to questioning if and how far they want to travel to get to work.”

Second, he adds, is the average age of the Filipino population. “At just 24 years old, it’s one of the youngest populations in Southeast Asia,” he explains. “Every year, two million young Filipinos enter the workforce and they want to work whenever and wherever.”

Finally, he suggests that flexspace is helping the Philippines lead the world in closing the gender gap. “This is something which can be more easily achieved by making it easier for women to work closer to home,” he says.

A global trend

As Wittig alludes to, the rise of suburban working did start before anyone had even heard of Covid-19. In May 2019, the Brookings Institution in Washington DC, published research based on census data which showed that population growth in US cities was slowing, and urban centres were being overtaken by suburban areas – reversing the trend from earlier in the decade.

This movement – it’s been called the Millennial Exodus – appears to have been sharply accelerated by the pandemic, and now looks like the pattern for years to come.

And it has significant implications for employers: thanks to Covid-19 workers are deciding they not only want to live outside city centres, but to work there, too. Why suffer the daily grind of a commute on crowded trains or sitting in traffic jams if you could take a much shorter hop, possibly even walking or cycling, to an office close to where you live?

The best of both worlds

With tens of millions of people worldwide working from home during the last six months, the corporate office model has been shattered. Many are likely to continue working from home some of the time after the pandemic has passed, but a new paradigm is emerging that combines the best of both worlds. Called the hub-and-spoke model, it involves a greatly reduced central corporate office connected to smaller more flexible workspaces located close to where employees actually live.

And the key beneficiary in that formula is proving to be the suburban because they still offer that connection to the cities and to the amenities that people have come to expect. Research by US real estate marketplace Zillow earlier this year, found that this factor is likely to limit people from moving too far out. “That means they’d also be moving farther from the wide variety of restaurants, shops, yoga studios, art galleries and other amenities typically associated with denser, urban locales,” it said.

“Given the value that many residents place on access to these features, we’re unlikely to see a large-scale rise of rural homesteaders. Instead, future growth driven by widespread remote work opportunities would likely favour suburban communities or secondary cities that offer those amenities along with more spacious homes and larger lots.”

“When it comes to the future of regional flexspace in the Philippines, I predict we’ll see a minimum growth of 30% year on year,” says Lars Wittig. “It’s the best way for businesses to attract and retain talent, allow for geographical independence and facilitate agility.”

Suburbia, whether it be commuter towns or the wide spaces beyond city limits is where most office workers live. And in future, as the world resets and re-appraises what’s important, it may be where they work, too.

Find out how Regus’ suburban centres can help your business adapt to the new world of work