The Entrepreneur’s Guide to Renting an Office in Singapore
6 minute read
You’ve done the hard part of coming up with a business idea, researching your market entry, and have even incorporated your company.
Congratulations on getting to the next stage of your business journey. Now you just have to sit back and let your business do the talking, right? Not necessarily, as there still might be a few other obstacles to overcome. And one of these is choosing an office space.
There are a number of factors that businesses must consider before making the decision to rent an office space, with various options that suit the different working styles and needs. As a new business owner, this can seem like a daunting task. This article will tackle your main concerns and advise you on what aspects you should pay most attention to.
Overview
How to assess if you need an office space
There are two key factors that play a huge part in deciding whether or not you need an office space:
Team Size
How many employees do you have? This will influence not just whether you should have an office, but also its size. So if your team consists of yourself and one or two other employees, there might not be a need to have a physical presence. However, if you have, perhaps, ten or more employees all geared up for work, it might make sense to have a space where everyone can gather.
Your team also should all be based in Singapore – there’s no use getting an office space if most of them are based in other countries and will only be in Singapore on an ad-hoc basis. It’s only wise to invest in an office space if it’s going to be used by a large percentage of your team.
Business functions and activities
Do you hold a lot of meetings with clients or business partners? Do these meetings take place in person or are they usually conducted virtually? If you run many in-person meetings, having an office space could give you an advantage.
Another question to consider is if the type of business you run requires your team to have frequent brainstorming sessions. An office space will be more conducive and better for productivity for such team activities, as opposed to teams that operate in isolation from others in the company.
What to look out for
Once you have assessed your situation and decided that an office space is the right option for your business, there are some key considerations when choosing one.
Condition and size of office space
You might want to pay attention to whether or not the office space has much natural light. Windows are a big plus because they let the sunlight in – and this is far better for your team’s morale than sitting in a dimly-lit office with just the lights providing brightness.
The size matters here too, so make sure that your employees won’t be cramped into a small space. You might also need more room if you store a lot of products or have visitors often. Think about other in-house amenities such as a pantry and an area for rest or casual get-togethers (think work, leisure or team-building).
Other things to look at include the cabling (will there be loads of wires around the whole office?), the level of noise around the area (is this conducive to do work?) and the overall condition of the building (is this a pleasant place to work in?).
Also take note of the lease duration and whether you have goals for expansion in the near future which might mean you’ll want to choose larger premises right now.
Location of office space
This is an especially important factor to attract good talent so make sure your new office is easily accessible for employees. It’s important to have amenities within walking distance, such as public transport, places to eat and car park facilities (both for staff and visitors). A bonus would be options like pharmacies, supermarkets/minimarts, gyms or coffee spots nearby so that your employees can have easy access to such places for both serious and fun reasons.
If your business is one that requires 24/7 access to an office, find out how accessible the building is after regular work hours and how safe the location is for your employees to go to work at night or on the weekends.
Impact on brand image
Find out who the other tenants in the office building are. Are any of your competitors located there too or nearby? Or perhaps there are companies you’d rather not be associated with.
Also take note of the safety and security aspects of the building, especially if you’re in a ‘sensitive’ industry such as tech or finance. You wouldn’t want your corporate image tainted because you’re located in a building with lax security. And you want your employees to feel safe too.
Office options in Singapore
As a global business hub, Singapore is not short on options when it comes to office space. However, this also means that rental fees are high in central locations. Search different areas and decide on one that best suits your business’ and your employees’ needs.
There are a few types of office spaces to pick in Singapore:
Conventional office
This involves renting an office space then furnishing it according to your needs. Keep in mind that a lot of research and time should be put into the process before deciding on a physical office space but also be aware of the long-term benefits of such a set-up.
Even though it might seem like a huge expense to kit it out with the furniture and IT infrastructure of your choice, it’s usually cheaper in the long run than having a serviced office.
Advantages:
- Provides long-term security for your business
- Layout can be customized to your preferences
- More options available across Singapore, compared with services offices
Disadvantages:
- A big commitment both financially and in terms of infrastructure
- You might end up with too little or too much space depending on your company’s growth
- A long-term commitment might not be favorable for companies that don’t know what the near future holds
Serviced office/business center
These are fully-furnished premises that offer more flexible leasing arrangements. They are located in Singapore’s central business district and run by companies that specialize in such businesses. It’s an ideal choice for start-ups that don’t want to commit too much financially or just want a short-term stepping stone into their own premises.
Advantages:
- Comes with a prestigious business address, with close proximity to transportation for easy access
- Offers immediate occupancy in premises that are fully-furnished and with all the amenities (eg. IT infrastructure, reception services, office cleaning) needed to run a business
- Provides the easy option to move as you grow, with the choice of additional space as your business expands
Disadvantages:
- A higher rental price than having your own premises
- Shared resources with other tenants means you won’t always have access when you need them
- Not as prestigious for your company’s reputation to have your office address in a shared space
Home office
This is ideal for businesses operating on a small scale. You could be a solo entrepreneur or run your own business consultancy, for example. The Urban Redevelopment Authority (URA) of Singapore offers a Home Office Scheme, which makes running an office from home much easier. The scheme allows homeowners, tenants or occupants of private residential property or HDB flats to operate small-scale offices in their homes, subject to the prevailing conditions of use.
You may use your home to run the administrative functions of your business and even hire up to two non-resident employees. Conditions to satisfy include confining your business activities within the residential premises, no advertisements/signages at the premises, and not becoming a nuisance to neighbors through generating smoke, odor, dust or chemical/liquid waste.
Advantages:
- Less expenses as no need to pay extra rental or travel costs
- No need to adapt to a new environment, thus being able to get straight into your work tasks
Disadvantages:
- Possibility of getting easily distracted as it’s your place of residence too
- Could be hard to stay motivated or achieve a work-life balance
- Lack of corporate address might lead to low credibility with customers and clients
Virtual office
Most companies that run serviced offices also offer the option of a virtual office instead. It has become an increasingly popular choice for small companies in recent years. You’ll be provided with a business address as well as services such as mail handling and dedicated phone numbers. You’ll also have access to meeting rooms or private offices as and when you need them.
Virtual office packages vary depending on the location and the services you sign up for. It could be as low as a few hundred to several thousand dollars a year.
Advantages:
- Gives you an official corporate address to give your company credibility, even if you’re working from home
- A cheaper option as it’s usually a ‘pay as you use’ service
- Easy access to meeting rooms if needed, rather than having to arrange appointments in more casual spots such as cafes
Disadvantages:
- Depending on the price you go for, it might not be a downtown address
- Might have hidden costs related to any services you top up or upon termination of contract
- Need to do due diligence on the virtual office provider and the quality of services offered
Your next steps
Once you’ve decided on the type of office you want and chosen the company you’re renting it from, it’s time to review the offer and sign the contract. Check points such as the lease duration, the office site possession date, and if there’s any rent-free period, such as when you’re doing renovations on a physical office space.
There are three important documents to note when confirming an offer:
Letter of Intent (LOI)
This is a non-legally binding contract that you issue, stating your intention to lease the premises. It will list the key terms and it’s up to the landlord to negotiate with you on any of them. It’s also common for the landlord to conduct due diligence on you, to ensure that you’re a credible business owner.
Letter of Offer (LOO)
This is a legally-binding document. The terms of the Tenancy Agreement are listed here and you’ll need to sign it and arrange any payments that have been agreed upon. Your landlord will then issue you with a Tenancy Agreement.
Tenancy Agreement
Both you and your landlord sign this, stating all the rights and responsibilities. Final payment is now required, then you’re ready to move in (or online, for a virtual office).
You’re good to go!
The deal is done and you can now call the office your own. Besides deciding on your office, there are plenty of other back-end operations that business owners have to be mindful of.
Take the hassle from managing back-office admin with Sleek’s range of services that can help make your lives easier, from accounting to tax and bookkeeping.
No matter what your company type, Sleek is here to guide you through the important business processes so that you can concentrate on running your business. Contact us today to find out more.
