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Renting Office Space in Singapore for Short-Term
With Singapore’s emergence as a ‘Key International Business Centre’ and ‘Asia’s Regional Business Hub’, the growth of business enterprises has never been greater. Along with this growth comes demands for economically viable, professional and attractive work spaces that are equipped to handle all business needs. Renting an office space that instantly meets the basic requirements of startups and fast-growing businesses can prove to be a challenging exercise. Consequently, serviced offices in business centres have become a popular rental option for many startup businesses as they present low start-up costs, flexible lease terms, better management of limited resources and a prestigious business address. Although a higher rental fee is the price you pay for this convenience, it is not impossible to find something that suits your budget.
Basic Introduction
What are Serviced Offices?
Serviced offices or business centres are professional, fully-equipped and ready-to-use office spaces, that are available for rent on an immediate basis and on flexible terms. Managed by specialised companies and located in Singapore’s CBD (Central Business District), these offices offer you a prestigious business address, a choice of different sizes of suites (that can accommodate 1-10 persons) and a flexible duration of tenancy.
You can benefit from an individual office suite within a managed facility that offers you access to amenities such as reception, utility rooms, conference / meeting rooms and advanced IT infrastructure. Rental fees are typically inclusive of the base rent, utilities, security, office furniture, etc.). The only additional costs incurred are for add-on services on a per usage basis.
Who should opt for Serviced Offices?
Serviced offices are best suited for businesses that are
- intending to relocate elsewhere and are currently seeking a temporary solution
- involved in client-interaction and are likely to benefit from a prestigious business address
- start-ups that are initially wanting to test markets and seek to focus on running their business without having to look into facility management
- in need of additional space/services for a short-term project
- likely to expand or downsize unpredictably
Many serviced offices are taken up by start-ups, consultancy firms, representative offices and project teams from industries such as finance, IT or insurance.
Advantages
- Strategic location in Singapore’s CBD in Grade A buildings and high profile business address like One Raffles Quay, Suntec City, Prudential Tower, Singapore Land Tower, One Fullerton, Centennial Towers (Marina Square), UOB Plaza, Ngee Ann City (Orchard Road), Raffles Place, Cecil street etc. These centrally located offices provide you with easy access to facilities like public transport, hotels, banks, restaurants etc.
- Immediate availability with no start-up costs and capital expenditure such as interior design, office furniture, equipment, renovation and agency fees.
- Readily available business support such as administrative staff, secretarial services as well as on-site meeting and conferencing facilities available on demand.
- Save unnecessary fixed costs by paying for additional services only as and when you use them.
- Flexible lease arrangement with short periods of commitment.
Disadvantages
- The convenience of a serviced office comes at a higher rental cost and may work out to be expensive in the long term.
- Sharing of common resources such as conference and meeting rooms does not guarantee availability at all times.
- These offices do not give you an option or scope for personal branding in terms of style or decor internally or externally
- Renting a serviced office might generate a negative association of being small and unstable. There is also lesser visibility of your business signage as it typically only forms part of a wall-mounted list on the reception directory board of the business center. This issue could be the single biggest drawback of getting a serviced office for many businesses.
Rental Guide
Rental costs
While costs may seem high initially, it is important to remember that the rent you pay includes almost all of the hidden costs that you would normally pay on top of rent in a traditional office. The cost of renting a serviced office rests on several factors such as size and location of your office and duration of your lease. Although all serviced offices in Singapore are located in the CBD, certain premium buildings like One Raffles Quay command a higher price than others like Prudential Towers for instance. If you opt for a long-term lease like one year and above, you can most likely negotiate your rental costs with the service provider.
The indicative rental fee for a workspace that seats 1-2 persons ranges from SGD 1,600 – SGD 4,000 per month, while a 6-10 people seating capacity can cost you between SGD 4,500 – SGD 10,000 a month depending on the office location in Singapore and the specific business centre you choose.
Monthly rental costs cover certain basic services/facilities offered by serviced offices. For other additional services, not covered in your rental fee, you will be charged on a pay-per-use basis. The additional services and the fees for the same may vary across service providers. It is important to determine services that are included in your rental fee and those that are not, before you finalise your decision.
| Service / Facilities | Included in the base rent? | Typical cost when charged extra |
|---|---|---|
| Reception Services | Inclusive | – |
| Copying and printing services | Not Inclusive | 20 – 40 cents per sheet (B&W), SGD 5-7 per sheet (colour) |
| Ad-hoc administrative assistance | Not Inclusive | SGD 15 – 30 per 20 mins |
| Managing messages, mails & faxes | Not Inclusive | 75 cents – SGD 2 per page and per message |
| Office Cleaning Services | Inclusive in rent | – |
| Local Area Network | Variable policy | SGD 80 – 100 per month |
| High Speed Broadband | Variable policy | SGD 100 – 300 per month per user |
| Telephone Line (incl. ISDN Line) | Variable policy | SGD 100 – 300 per month per user |
| Office Furniture | Inclusive | – |
| Electronic Devices Hire – Computers/LCD projector etc. | Variable policy | SGD 40 – 50 per hour |
| Meeting and Conference Rooms | Variable policy | SGD 45 – 250 per hour |
| IT Support & Maintenance | Variable policy | SGD 20 – 40 per 15 mins |
| access control security, alarm security | Inclusive | – |
| A/C, Maintenance and Lighting | Inclusive | – |
| Pantry Usage | Variable policy | SGD 40 – 70 per month per user |
| Signage | Variable policy | SGD 25 – 50 |
Lease duration & Security Deposit
Usually, serviced offices give you control over the term of your tenancy lease from three months to six months to one year, and in certain cases, even longer. Generally, there are cost benefits for longer commitments. This arrangement generates flexibility as your business needs change. You also have the option to up-size or down-size your workspace requirements at short notice and at any time subject to availability. All you need to do is sign up a new lease and either top up the difference or make deductions from the lease security deposit, as the case may be. Furthermore, there will be no administrative charge for upgrading to a higher-priced package or downgrading to lower-priced one.
Most serviced offices in Singapore generally ask you to pay a rental deposit, usually 1-3 months rental fees prior to occupation. This deposit is refundable (upon a written request by you, after the termination of the licence agreement) and will be returned to you at the end of your lease, provided there are no payment dues and the office is left in the agreed condition. However, the lease security deposit will be forfeited on pre-mature termination of the lease. There is no other form of guarantee or assurance that is generally required while signing the lease and this limits your liability.
Common Lease Agreement Terms & Conditions
Lease Agreements of serviced offices are often simple and straightforward and comprise of two-four pages, and do not incur legal bills nor stamp duties. The common terms found in a serviced office lease agreement include:
- Licence – specifies the right or licence to occupy the workspace for a fixed tenor
- Licence Fee – amount of monthly fee payable, payment method and payment date
- Pay-and-use Service Fee – specifies the additional fee payable for additional services utilised, payment date and other related terms
- Security Deposit – states the conditions under which the security deposit can be withheld by the licensor and conditions under which it is refundable to the licensee
- Insurance – states that the licensee holds the right to insure all his goods and that the licensor is not held responsible
- Government charges, rates and taxes – to be paid by the licensee, if any
- Use and care of premises – mentions what steps the licensee should take to maintain the condition of premises leased
- Use of equipment – terms and conditions
- Termination – covers notice period and other relevant terms
Payment & Moving In
After the tenancy agreement has been duly signed and the necessary security deposit paid, you are free to move in and begin your business operations.
Choosing Among Many Business Centres
If you wish to rent a serviced office in Singapore, there are several service providers who offer you this facility. Your choice of a service provider will depend on your search criteria which includes your business specific requirements and the proposed budget. The vendor that best addresses your needs will naturally be the right choice.
For instance, if you are an IT consultancy, extensive usage of computers, High Speed Broadband, Local Area Network and IT support staff are crucial factors for your daily business operations. It naturally wouldn’t make business sense to use a service provider that does not provide PCs or charges you a high fee for these facilities. Similarly, if you are in a customer-facing business and regularly require meeting/conference rooms, it is important to check how much the service provider is going to charge you for using this facility.
Another factor of consideration is the location of the buildings and the office space. While almost all serviced offices are located in the CBD’s Grade A buildings, your business may find it particularly beneficial to be located in a premium building like One Raffles Quay or Centennial Towers. Hence, it is important to ascertain which service providers have offices in a location that best suits your needs.
If you find that most service providers offer similar facilities, then the natural factor of consideration will rest on the most competitive price. It is always prudent to get a quote from three-four service providers and engage in a cost-comparison exercise to get the best deals. A tour of the office is often recommended as it gives you a clear picture of what facilities are available and helps you get a look-and-feel of the space.
Final Thoughts
Renting a serviced office is a convenient and flexible option, with minimal formalities and paperwork. However, it is important to weigh the pros and cons and make an informed decision as these offices are an expensive option in the long run. The best approach is to contact a few service providers and compare their rental fee and services covered in the rental costs before arriving at any decision. The Lease Agreement is an important document and it is important that you fully understand the terms and conditions before you sign the document.