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Renting Office in Singapore: 

The Essentials You Need to Know

Finding a new office space is an exciting task, but also very challenging. There are a lot of questions that we’re sure come to mind, and we’re hoping to help you get answers to some of the most urgent questions on office rental. Questions such as:

  • What should you know before you kick-start your office search?
  • What to expect?
  • How to go about finding and renting office space in the most efficient way with no bad surprises?
  • Is cheap office space rental in Singapore always good?

To help you get through the clutter of all the options available, we prepared this document for you to make sure you’re not missing anything.

Let’s start!

1.Your Business Use & Types of Property Suitable

The cost to rent a light industrial space is often lower than that of a premium commercial office building. But the property may not be allowed for your type of business. Available options for non-industrial business- Shophouses, Commercial or Mixed Commercial offices.

Click images below for available shophouses in prime location.


2. Considering the other Office Alternative: Co-working space

If a commercial office space does not work for your business and your team is relatively small, you may want to evaluate the co-working or flexible space option as the other office alternative.

Office spaces and co-working spaces have their own benefits. In your own office, you can handle business in a private setting, you can impress clientele, and attract talent with your own unique corporate branding, culture and setting.

In a co-working space, you have the flexibility of shorter lease term that will satisfy your smaller team with less to worry about utilities, office maintenance and up-keeping. In co-working space, the rental is usually by headcount/ desk with flexible lease period like a few months while permanent office space rent is chargeable by per square footage with lease period at least 2 – 3years.


Permanent Office Rental Calculation Method: Rent Per Square Foot

For instance, a 2,500 square foot permanent office space is quoted a monthly rent of $11.50 per square foot. The monthly rent is therefore 2,500 X $11.50 = $28,750. Extra cost may include maintenance-fee, utilities, cleaning.


Flexible/ Co-working Space Rental Calculation Method: Rent Per Headcount

For instance, a private room in flexible or co-working space with 25 desks is quoted a monthly rent of $600 per headcount. The monthly rent is therefore 25 X $600 = $15,000. You can assess the general shared spaces and amenities but the other costs for printing and booking of meeting rooms will be chargeable on a per-use basis.


3. Choosing the Right Office Location

The choice of location largely depends on individual business needs and activities. Easy accessibility to public transport is critical in staff recruitment and retention. At the same time, it is important to have food and other amenities (e.g. banks, shops, gyms) within close proximity.

Location will influence the rental pricing. Therefore, you will need to strike a balance between location, office condition and rent. To help you with this, we listed below some of Singapore’s notable business districts:

Singapore Central Business District

Central Business District (CBD)

This is the busiest Singapore’s business hub, which comprise of Raffles Place, Tanjong Pagar, Cecil, Marina Bay and Downtown. Home to many major banking, financial institutions, commodities and technology companies.


Click to see available office units in Central Business District in Singapore

Paya Lebar

Paya Lebar, a business hub sitting between the Central Business District and Changi Airport, is an area that possesses strong cultural Malay and Peranakan heritage anchored by Wisma Geylang Serai and Joo Chiat nearby. Located in the heart of Paya Lebar Central, there are mixed commercial developments like Paya Lebar Quarters, Paya Lebar Square, KINEX and SingPost Centre.

Click to see available office units in Paya Lebar

Bugis/ Rochor


Bugis sits just outside the CBD and recent developments have given this civic district a new flavor. Being part of the Rocher-Bugis corridor, new development such as Duo and the up-coming Midtown project have seen major tenants from the CBD moving into this locate. Flanked by civic precinct such as the Arab quarters, the added colorful civic backdrop provides a unique experience for tenants who enjoy a different type of vibrancy and yet still enjoying the comfort that a city centre location can provide.

Click to see available office units in Bugis/ Rochor

harbourfront precinct

Harbourfront

Located along Singapore’s southern coast, HarbourFront is one of Singapore’s many gateways to the sea. The hustle and bustle of this lively district centres around VivoCity—Singapore’s largest shopping mall—the interconnected HarbourFront Centre, which houses retail stores and the Singapore Cruise Centre, with cruises and ferries departing for nearby islands of Singapore and Indonesia.

The precinct also features premium office buildings like HarbourFront Tower One, Keppel Bay Tower and Bank of America Merrill Lynch HarbourFront and is highly accessible- within 5-minute drive from Central Business District and well-connected by HarbourFront MRT station and Bus Interchange.

Click to see available office units in Harbourfront

Changi Business Park

Changi Business Park, a financial hub located in Changi South, in the eastern part of Singapore. It hosts a good mixture of business companies and major leading companies like Citibank, Standard Chartered Bank, Credit Suisse, DBS Bank, Ultro Technology, Xilinix, Invensys, IBM and Honeywell.

Click to see available office units in Changi Business Park

One-North

One-North is a business park and a high-tech research and development hub.  Buildings within One-North tend to be segregated into various clusters named ‘-polises’ (polis means city in Greek), including Biopolis, Fusionopolis and Mediapolis. Companies with similar businesses, such as healthcare, media or biomedical science, are usually grouped in the same cluster.

Click to see available office units in One-North

Jurong

Jurong East has undergone significant gentrification with the introduction of major developments including Westgate, Jem, Big Box, Ng Teng Fong General Hospital and Vision Exchange. The Jurong Gateway is highly-connected with an integrated network of elevated pedestrian walkways at the ground level and J-Walk, a 2nd storey elevated pedestrian network.

Click to see available office units in Jurong

Alexandra

Sitting amidst lush greenery, the Alexandra Precinct is about 10 minutes drive from the Central Business District. It features the Mapletree Business City’s office and business park, PSA Building, Alexandra Technopark and the Alexandra Retail Centre which provides retail convenience and amenities to the working population and nearby residents in the precinct.

Click to see available office units in Alexandra

Marina Centre

Marina Centre is a commercial district that is well supported by a wide range of retail and F&B establishments. Situated east of the Central Business District, this location is favoured by a mix of financial, commodities and technology companies. The location is anchored by Suntec City, a significant mixed use development comprising of world class convention space, a significant shopping-mall and international hotels including the Ritz Carlton, the Conrad Centennial, the Pan Pacific Hotel amongst others. The plethora of retail and F&B offerings, including car-park offerings available in both Suntec City Mall and the adjacent Millenia Walk, remain a strong draw for office users.  Marina Centre is also flanked by the Esplanade and Promenade MRT stations.

Click to see available office units in Marina Centre

Marina Centre Precinct

4. Kickstart the process on the right note. Avoid Common Office Leasing Mistakes

To do it, we suggest to keep five key requirements (other than location and type of property) in mind:

Size of office space

Your office size depends on the number of employees and the requirement on other shared spaces. Do evaluate your long term and short term plans. You may want to allocate additional space for team growth. Future proof your decision by understanding where your business is heading in the next 2-3 years. At spaceSense, we have a tool called The Floor Space Calculator. It is a free tool that allows you to estimate your floor size based on headcount, collaboration space and meeting room.

Timing

If you are certain to relocate after your current office lease expires, do allocate at least 4-5 months in advance for the time required in office search, site viewings, lease negotiation, renovation and even reinstatement of the existing office space. A few uncontrollable variables, such as lease negotiation time, renovation site issues, may give your timeline some hiccups.  Hence, do give yourself adequate timing in the entire process.

Budget

Your monthly budget for office space will affect the location you can afford. Do work out the company’s budget and cash flow before sourcing for office space. Besides the typical 1 month’s advance rent, and security deposit (typically 2-3 months at least, as required by landlords), there are other initial cost commitment like renovation deposit, stamp duty, fitting-out, reinstatement and relocation cost, deposit for utilities etc to consider.

Lease Term

The market norm office lease period in Singapore is typically 2 to 3 years, with longer leases available for 5 to 6 years if you intend to occupy a larger space.  As a common practice, landlords will usually grant a tenant an option to renew for a further term of similar duration at a rent either pre-agreed upon by both parties or at the prevailing market rent rate at the time of renewal. 

At least 4-5 months prior to lease expiry, you will need to decide whether to renew the lease or to relocate. The range of factors to consider are: 

  1. Renewal office lease pricing
  2. Current office rental market pricing
  3. Current and future business goals ie. headcount growth forecast
  4. Associated cost with office relocation ie. reinstatement costs, moving out costs and new office renovation cost

5. The Typical Office Leasing Process

After confirming the critical requirements like the floor size, budget and location, the typical office leasing process could take as fast as 2 weeks or more, depending on the response of the tenant and landlord.  The process is typically as follows:

A. Search for the Office Space which could best fit your requirement

At spaceSense,  we work directly with landlords to provide unique listings to help you skip the hassle in verifying space. We have Commercial Real Estate Advisors to represent your interest in the search, viewings and negotiation. Armed with local market knowledge, we become your single point of contact, or what we like to call all-in-one office solutions. And the best part: no agent fee involved. 

B. Arrange for site viewing with your key decision makers

Going on a scheduled site-viewing is one of the most important, and overlooked steps. It may sound like a chore but this is your chance to evaluate the ins-and-outs of your preferred office space. Here are some things you may want to look out for: 

  • Office unit condition. ie. Is it bare, semi-furnished or furnished? Is there raised floor or cement screed flooring? Does it come with Air-conditioning system, window view or lift frontage?
  • Nearby facilities, amenities, F&B options
  • Accessibility to public transport
  • Availability of car parking

C. Negotiation on lease terms

No lease is standard. You may need a professional Commercial Real Estate Advisor with good local market knowledge to represent your interest and help you negotiate these important office lease terms for your company. 

Important Office Lease Terms to negotiate:

  • Monthly Rental
  • Office Lease Period
  • Rent Free/ Fitting out Period
  • Security Deposit
  • Site Possession Date
high angle view of lawyer and client looking at each other while discussing contract in office

D. Formalising Your Interest

Letter Of Intent (LOI)

After you have identified the office space that suits your needs, submit an LOI to the Landlord’s representative, indicating your interest in renting the space. The LOI should outline key lease terms such as date of possession, date of lease commencement, duration of the term, gross rent and other essential information you wish from the landlord. Note that negotiations at this step might go on for a while between you and the landlord. 

Letter Of Offer (LOO)

Upon receiving the LOI, the landlord will usually perform a check on the company’s profile on Accounting and Corporate Regulatory Authority ACRA  and paid-up capital. Once the landlord is satisfied with the company’s application and the two parties have agreed on the basic lease terms, a LOO will be issued by the landlord along with a sample copy of the Tenancy Agreement document. The landlord will ask you to return a signed copy of the LOO along with security deposit, stamp fee and for some landlords, 1 month’s advance rental may be required. When the Letter of Offer is signed and the necessary payment is given, the premises will be secured, subject to the signing of the Tenancy Agreement.

E. Review and sign off the Tenancy Agreement

After the acceptance of the Letter of Offer, you will be given a lease or tenancy agreement for signing. At this point you may go with your landlord’s legal documentation or may appoint your own solicitor to attend to the drawing up of the final tenancy agreement. You are required to pay stamp duty to the Internal Revenue Authority of Singapore (IRAS) once you have signed the rental agreement. Stamp duty for leases involving a fixed rental throughout the rental period will be computed based on the gross rent and must be paid within 14 days from the date of execution if the document is signed in Singapore, or within 30 days of its receipt in Singapore if the document is signed overseas.

6. After signing the Tenancy Agreement

If you have reinstatement obligation for your existing office, this is the good time to engage reinstatement contractor and work out the cost and timing to return the reinstated premise at the end of the lease term.

For the new office space, you may engage Office Interior Designer or Contractor to carry out any renovations or minor fitting out work needed.  Best to kickstart the renovation upon site possession. You will also need to contact the relevant authorities for getting connections such as utilities, telephone, internet, etc up and running on time.  

Once you have completed your fitting-out works, you can move in and commence your business operations! Cut a majority of the office leasing  hassle by using spaceSense’s all-in-one office solutions. It’s free, it’s easy, and it’s designed to save you time and effort.

Don’t believe us? Fair enough…try it for yourself

Kho ZhenHong, Commercial Real Estate Advisor

About the Writer

ZhenHong Kho

Commercial Real Estate Advisor I  Sakal Real Estate Partners Ltd (Sakal), an exclusive partner with spaceSense.co 

ZhenHong provides leasing advisory services and this includes qualifying of spaces, conducting lease negotiations and guiding corporate office tenants throughout the leasing process.  Formerly from a real estate developer company, he has handled a multitude of leasing deals, with regards to Office, Retail and F&B spaces. He is a Licensed Real Estate Advisor and holds a B.Sc. Real Estate (Distinction) from the National University of Singapore.