Renting an office space in land-scarce Singapore can be expensive. That’s why businesses have to carefully consider their needs and whether they can see themselves working efficiently out of the office they eventually rent.
Employees in Singapore are also highly-skilled – and may be required to work with appropriate equipment as well as require adequate office amenities. As Singapore also serves as regional and global hubs, for many business, it’s common to see limited work-from-home days for local employees.
What all this means is that office space is going to be in demand as companies look to secure adequate workspaces for their employees.
If you are looking for an office space for your team, here are 5 factors to consider when renting an office space in Singapore.
#1 Size & Space Requirements
While there may be some lasting effects on how the pandemic has changed they way we work, many companies are increasingly limiting work-from-home to only 1 to 2 days a week.
While such arrangements are still ideal as employees have more leeway to find work-life balance, they create their own set of challenges for companies when planning office space.
In a traditional office, a rule of thumb would be to provide about 100 square feet for each worker, or a 1,000 square feet office for a team of 10. The space should also include shared resources such as meeting rooms, phone booths and a pantry.
Carefully considering your space requirements and the ideal size of your office will be vital as it would ultimately support the office culture you hope to build. If you want employees to work in the office most days (happily), providing a bigger office with more amenities will better accommodate their needs.
If your employees are still not coming into the office daily, you need to consider whether you intend to assign a designated workspace for every worker, even if they might only be coming into the office 1-2 times a week. From a usage perspective, this might not be a cost-efficient option as it means paying for space that won’t be used more than half the time.
The alternative is to provide hot desks instead of fixed desks. Hot desks allow for the sharing of resources among workers who are not coming into the office daily. For example, if you have a team of 30, you may only need 15 desks. The downside of hot desks is that your employees cannot personalise their own work areas.
Also, if your workers tend to return to the office on the same days (e.g. they have to attend the same meetings), then you will have a problem where the office is too small on some days but is empty on other days.
#2 Ideal Location
First impression counts, a lot! Some of us may have bad experiences finding our way to an office located in an “ulu” location, or driving around in a circle trying to find the right building.
If you are a FinTech or finance company, you would probably want an office within the CBD as it makes it more convenient for meetings. In other industries such as manufacturing, F&B or construction, it might be better to be based in the districts where most of your business partners and suppliers are also located in.
Location also matters to current and prospective employees. Though Singapore may be a small country, not everyone is going to be excited working in Tuas if they live in Punggol, or going to Changi if they stay at Choa Chu Kang.
While distance isn’t insurmountable if a person is passionate about his job and is well remunerated, it’s nevertheless an inconvenience if your office is located at the extreme ends of Singapore.
#3 Rental Cost
We can’t ignore the cost of rental. Even within the same district, rental rates can differ significantly depending on the type of office you get.
For example, as of 1Q2024, the median rental rates for office space in core business areas in Downtown Core and Orchard Planning Area is $8.22 per square foot (PSF). So if you are looking for a 2,000 sqft office, you can pay close to $16,500 per month.
Of course, this is the median rate, and depending on the building you choose, the rental can also differ significantly. Buildings can be classified as Grade A+, Grade A, Grade B or Grade C (for spaces outside of the CBD).
Ultimately, the budget you have will determine the size and the location trade-off decisions that you have to make. Some companies may prefer a larger space in a less-than-ideal location while others may prefer having a good location but with a smaller space.
Read Also: Business Owners’ Guide To Office Rents In Singapore By Districts
#4 Lease Duration
Companies are unlikely to stay stagnant when it comes to office space requirements. Many companies may quickly outgrow the size of their office if they are fast-growing. Others, may not need as much space if they are able to grow their headcount overseas
When it comes to lease duration, it’s important to sign a lease that is in line with your own business expansion timeline. If you are at a growth stage where you envision fast year-on-year growth, then a shorter 1-year lease might be ideal. If your business is at a steady mature stage, then a multi-year lease might provide greater stability for the company. Similarly, if you plan to expand overseas headcount rather than in Singapore, then you may prefer the flexibility of a shorter lease duration.
#5 Renovation Cost
When renting an office space, you would be responsible for renovation work that takes place. Bear in mind this is a sunk cost and if you choose not to renew your lease, you would also need to bear the cost of reinstating the property back to its original condition. So factor renovation costs into your rental decision.
Read Also: Where To Buy Or Sell Your Second-Hand Furniture When You Shift Offices
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