Business Office Space Options In Singapore
Once you have decided to setup a business in Singapore, at some point of time, office rental issues will become important to you. For many customer-facing businesses, the success or failure of the business will hinge partly on the owner’s selectivity and judgment in picking the right location for renting an office. Singapore being at the core of the global business hub translates into all kinds of business enterprises emerging at every possible nook and cranny.
A high rental fee is the price you have to pay for the best spots, but with a little bit of looking around and getting your research right, you might just be able to find a suitable rental location for even the tightest of budgets. An initial step in business is to decide where you will live and where your business will be located. You may have the opportunity to relocate to an area where you would really enjoy living and working.
This report explores the different rental options found in Singapore, and gives you some basic information to help you identify the right type of office to rent for your needs.
Serviced Office / Business Centres
Serviced Offices/Business Centres are ready-made fully-furnished offices in Singapore that can be the ideal rental choice for small companies looking for a low startup cost option, flexible lease terms, and prestigious business address. Serviced Offices are found in the business districts of Singapore, and are managed by specialized companies that rent fully-equipped individual 1-10 person offices to other companies that need it. Businesses that are looking for a temporary solution for the interim while they move onto more permanent premises can also benefit from this option.
- Serviced Offices/Business Centres in Singapore are especially popular with new startups as they are available immediately, come fully furnished and equipped with all amenities vital to business operations from mail support, reception services, IT infrastructure, internet connectivity and telecom connections to office cleaning, air conditioning, electricity and lighting, provision of refreshments for staff and other basic utilities.
- When renting a serviced office, there is no capital expenditure required, and long-term financial commitment is not an issue as the lease terms come according to your preferences and needs. Rental terms can be fixed on a month-to-month basis.
- Serviced Offices/Business Centres allow tenants to share common office facilities such as copy machines, conference rooms, meeting rooms, etc. which may otherwise be difficult to afford in the early stages of a business startup. Some serviced offices even offer ‘hot desks’ which involves one desk or terminal link, shared among several people that use the desk at different times.
- Renting a Serviced Office means prestigious business address for your company as these Business Centres are typically situated at Singapore’s prime locations in Grade A buildings.
- Serviced Offices/Business Centres can provide you with flexible growth option at the same location i.e. you can take up additional space as you grow. This is very useful in startup stages as the early growth pattern is often quite unpredictable.
- Serviced Offices/Business Centres provide a convenient transportation option for your staff as well clients. Most of the serviced offices in Singapore are situated in major business areas and thus are in close proximity to MRT stations and major highways.
- The flexibility of a Serviced Office/Business Center comes at a higher rental price. In the long-run, renting a serviced office will likely turn out to be a much more expensive option when compared to renting a conventional office.
- Since common resources such as conference and meeting rooms are shared among all tenants, these resources may not be available when you actually need them.
- Renting your office in a Business Centre might give the impression of a small and unstable company to your clients. Your company name might not be listed at all or listed along with tens of other companies at the Business Centre.
Depending on location, renting a serviced office in Singapore that accommodates 2-3 employees can typically cost anywhere from S$2000 to S$3000 per month. Other in-house facilities such as meeting rooms and conference rooms come at an additional cost (on “as needed” basis) of S$20 to S$50 per hour.
Renting a conventional office in Singapore usually means renting empty office space that you will need to furnish on your own with furniture, IT infrastructure, utilities, manpower. etc. Finding the right building and arranging a conventional office lease can be a lengthy task, but if your company is on a stable growth-path, the long-term benefits can make it worth the effort especially if your company has more than few employees. Although you may have substantial initial capital costs in undertaking a private office lease, your monthly rental expenses will likely be lower than a serviced office.
- Office space and layout can be customized to suit your the specific needs
- A conventional lease gives you the security of longer-term tenure at the same premises with a predictable rent- increase. Many lease agreements also have the option of renewing the lease at predetermined rates and conditions. Having to relocate your office to a different location might cause significant disruption to your business.
- You will have a much wider choices of locations and buildings for leasing a private office in Singapore as opposed to a serviced office. Serviced offices tend to concentrate in the prime areas of Singapore only.
- For conventional office space, though the initial capital outlay can be more, the ongoing running costs will likely be significantly lower.
- Many non-customer facing companies can get by with a bare-bone office layout and furnishing. In such cases, renting a conventional office is probably more cost effective even for new startups, provided favorable lease arrangements can be made.
- Renting a private office space in Singapore requires a long-term lease of at least 2+ years. If you are a startup and cannot yet predict the future of your company, making such a commitment might not be the best option for you.
- Leasing a conventional office space will likely require significant initial capital expenditure for setting up the office infrastructure.
- If you are unable to predict the manpower growth of your company accurately, you may end up leasing too little space or too much space.
- You will have the responsibility of complete office infrastructure maintenance including reception, phone answering, mail handling, utilities services, IT setup and ongoing maintenance, office housekeeping, and so on.
Finding the right building and arranging conventional leased office space in Singapore can take some time. The conventional office space in Singapore is is split into government-owned premises and private-owned premises. Although the rents are at government-owned commercial premises are usually lower than the private-owned premises, most of the government-owned commercial buildings are located away from the city-centre.
Private-Owned Commercial Buildings
There is an abundance of private-owned commercial buildings in Singapore and you should be able to locate office space for your rental needs in almost any neighborhood of Singapore including prime locations. The rent of an office in such a building will vary depending on the location and age of the building. If you are interested in renting private-owned premises, it is often prudent to appoint an agent to assist in your search and negotiate the main terms of your lease.
Government-Owned Commercial Buildings
If you wish to explore renting out government-owned premises, you can rent or lease them from Jurong Town Corporation (JTC) of Singapore. JTC offers a wide range of premises based for your office space or factory space needs. Government owned premises can offer you stack-up factories, technopreneur centres, incubators for start-up companies, business parks, hubs for research & development and entrepreneurial activities, warehousing space, industry clusters such as the Jurong Island chemicals hub, wafer fabrication parks, advanced display park, two biomedical parks, logistics hubs for aerospace, chemical, general warehousing industries and even dedicated food factories.
Renting an office in a government-owned premise in Singapore can make a good sense if a centrally located high-profile location is not required for your type of business.
Virtual office is a service provided by most of the serviced office business centres in Singapore. Virtual office solution offers you an office experience without the physical space. A typical virtual office package in Singapore will provide your business with the use of a corporate business address; dedicated phone/fax numbers, personalized telephone answering; mail handling; and the use of private offices/meetings rooms/secretarial services on an ad-hoc basis.
Using the services of a virtual office solution on a ‘pay as you use’ basis, such as using a personalized answering service or a virtual receptionist might be a cheaper and less risky option to consider before investing in more permanent premise arrangements, and can act as means of experimenting without blowing your budget. Virtual Office is a suitable rental choice for:
- Entrepreneurs headquartered abroad that need to show a business presence in Singapore but don’t plan to hire any staff.
- Entrepreneurs operating from home requiring an official address for credibility.
- Small startups that have setup a physical office at a budget location but require a business address at a prestigious location for corporate image purposes.
If your business does require frequent meetings with your clients, presenting your virtual office as your real physical office is usually not a good idea. Your clients may just walk into the business centre hoping to see your office or meet you only to find out that you don’t have a physical office there. Virtual office rental packages in Singapore can range from S$50-S$200/month depending upon the address location and the range of services offered.
If your business operates on a very small scale, you might want to consider working from home. Typical users of Home Offices include individual entrepreneurs, consultants, real estate agents, lawyers and company employees working from home. Singapore’s Home Office Scheme allows people living in a private or HDB property to conduct small-scale businesses within their homes, as long as their business activities do not fall under the scheme’s negative list.
To run a home office, you must be the owner or tenant of a home, or be authorized to stay in the home. The scheme defines Home Offices as “premises used by its occupants primarily for residential purposes with part or parts of the premises being used by the occupants as an office” and emphasizes that the said premises cannot facilitate more than two persons who are engaged in the operation of the office and who are not residents in those premises.
Registration with Housing & Development Board (for HDB premises) or Urban Redevelopment Authority (for private premises) is required in order to use your living quarters as a home office in Singapore. To ensure businesses do not cause annoyance to other residents, some restrictions are imposed on home offices such as a) you shall not generate smoke, noise or other forms of pollution; b) you cannot have more than 2 employees who don’t live there; c) you cannot display external signboards and advertisements. An example of business activities not allowed in HDB residential premises (i.e. under negative list) include food catering, commercial schools, or maid agencies.
One of the most important considerations for new business startups in Singapore revolves around renting an office. Hasty decisions may cost your business losses while a more informed approach may ensure that the business is up and running for many years to come. Don’t hurry your office rental decision. Determine the right type of office rental option for you first and then identify the right location for renting your Singapore office. There is no such thing as the last good location. Don’t judge entirely on rent. Pay fair rent for an outstanding location. Don’t let the lessor dictate all the lease terms.