Network connectivity and office occupiers' space decision: the case of Suntec City
| Published date | 01 May 2006 |
| Date | 01 May 2006 |
| DOI | https://doi.org/10.1108/14635780610659937 |
| Pages | 221-238 |
| Author | Tien Foo Sing,Joseph T.L. Ooi,Ah Long Wong,Patrick K.K. Lum |
| Subject Matter | Property management & built environment |
Network connectivity and office
occupiers’ space decision:
the case of Suntec City
Tien Foo Sing and Joseph T.L. Ooi
Department of Real Estate, National University of Singapore, Singapore
Ah Long Wong
Pacific Star Investment & Development Private Limited, Singapore, and
Patrick K.K. Lum
Suntec City Development Limited, Singapore
Abstract
Purpose – This paper sets out to empirically test the office space choice decision of firms currently
occupying offices in Suntec City, Singapore.
Design/methodology/approach – Empirical data on office space determinants of occupiers in
Suntec City office towers were collected via a mailed questionnaire from March to June 2004. Based on
a consolidated sample list of 342 firms, 61 responses from the occupiers, which represent a response
rate of 17.8 percent, were received.
Findings – Based on the survey results on office space preference of occupiers in Suntec City, the
mean score statistics show that image and prestige of an office location and accessibility by public
transport are the two most highly ranked factors by the firms.
Research limitations/implications – The selection of Suntec City as a sample case study may
help to control the heterogeneity of building factor, but it will also limit the generalization of the
findings. However, the results provide support to the deliberate strategies by the management to
create a pro-business environment and also to connect the space through deliberate network effects.
The second limitation is the uneven distribution of sample firms by size in the survey.
Originality/value – In many office space choice studies, building and accessibility factors were
invariably found to be significant determinants of office location. In this study, non-location and
network connectivity factors were included in the empirical tests, and they were found to be significant
in influencing office space decision of selected clusters of firms in a building.
Keywords Agglomeration,Office buildings, Office layout, Singapore
Paper type Research paper
1. Introduction
Historically, firms choose to cluster in a center that offers comparative location
advantages, such as proximity to labors and suppliers, accessibility to major
The current issue and full text archive of this journal is available at
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The authors wish to thank NUS for the research grant and Suntec City Development Limited for
its support and participation in the above study. They would also like to thank Joan Teo and her
colleagues for their assistance and support in the survey exercise. The research assistance of
Chu, Yongqiang, Seah, Huili Irene, and Ivy Loh and Pearl Lok is appreciated. Comments are
welcome.
The case of
Suntec City
221
Received October 2004
Accepted October 2005
Journal of Property Investment &
Finance
Vol. 24 No. 3, 2006
pp. 221-238
qEmerald Group Publishing Limited
1463-578X
DOI 10.1108/14635780610659937
transportation systems and convenience of face-to-face contacts. However, when the
center grows to a critical size, the agglomeration benefits of the center diminish as a
result of growing costs of traffic congestion and increased office density. Firms are
then more ready to trade-off agglomeration economies for new office location in fringe
areas, which offer lower density office space with newer facilities at lower costs.
Subcenters are formed, as a result, to accommodate the outward movement of firms
from the existing center (Di Pasquale and Wheaton, 1996). The decentralization process
is further accelerated with the advancement of the information and communications
technology (ICT), which breaks down the geographical barrier and reduces the
significance of face-to-face contacts in the Center Business District (CBD) (Ball et al.,
1998).
In the urban economic literature, the bid-rent function is defined on the assumption
that there exists only a unitary city. This assumption has been challenged by evidence
supporting the existence of subcenters (Dunse et al., 2001, 2002). On the demand side,
the behavioral studies question the assumptions in the classical urban economic model
that firms are homogenous and have perfect information in their location choice
decision (Wyatt, 1999; Leishman and Watkins, 2004; Leishman et al., 2003).
Increasingly, in an ICT driven business environment, “location, location and location”
is no longer a binding mantra in occupiers’ choice for preferred office space. For office
buildings that are not endowed with good accessibility and location advantages,
“connectivity, connectivity and connectivity” have been adopted as an important
differentiating ingredient of office buildings in attracting targeted groups of occupiers.
Connectivity, in this context, is not just referred to the broadband infra-structure in an
office building. It, however, entails creating an intra-firms networking of businesses in
complimentary areas, or even firms in the same business type, which collectively bring
“agglomeration economies” into a building. Suntec City, an integrated commercial
development located in the reclaimed Marina Center area to the north east of the prime
Raffles Place financial center of Singapore, is a project that has effectively utilized ICT
to position itself as a preferred office location:
Internet value is a “perceived value” derived by creating a public perception that, by virtue of
its positive branding or image, the market is prepared to value the development higher than
market or real estate value (Wong (2000) The Chief Executive Officer of Suntec City
Development).
This paper aims to extend the research along the behavioral agenda by investigating
the office space choice decision of firms in Suntec City, Singapore. The research design
differs from the earlier studies in two aspects. First, by selecting Suntec City office as a
case for analysis, heterogeneity of office space can be controlled in the exercise. Second,
network effects among firms in complimentary and similar businesses within the
subject building can be explicitly tested. The paper is organized into five sections.
Section 1 provides the motivations and objectives of the studies. Section 2 reviews
literature relating to the agglomeration economies and the behavioral aspect of office
location decision. Section 3 gives an overview of office submarkets in CBD and Marina
Center areas, and summarizes the case facts of Suntec City. Section 4 describes data
collection, survey process, and empirical tests. The empirical design and results are
discussed in Section 5. Section 6 concludes the findings.
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