Singapore is one of the key economic players in the Asia-Pacific region with a pro-business environment that hoists up local start-ups and attracts foreign companies. The country has a strong economy thanks to its location, programmes supporting entrepreneurs, and political stability made possible by the most effective government in Asia, according to the 2022 Chandler Good Government Index. Therefore, there are many people starting a business in Singapore looking for office space in the island country.
Why rent an office in Singapore?
Singapore is a cosy city-state spanning an area of just 733 square kilometres, and with a reputation as a maritime and financial hub, its commercial real estate market is competitive. Renting an office space in Singapore offers companies a strategic location within a few hours’ flight of major Asian countries, a skilled and multilingual workforce, and strict laws upholding fairness and efficiency in business activities.
With a mixing pot of harmoniously co-existing cultures, Singapore is also a vibrant place for dining and entertainment that make it not only a good place to conduct business, but to live and play.
How much does it cost to rent an office in Singapore?
As your business scales up, one of the big next steps is finding the right headquarters for your team to thrive. However, the time and financial costs of sourcing a new office can be draining, making it easy to spend too many resources doing it. On your search for a business space in Singapore within your requirements and budget, consider the following points.
Location
The first, most important factor is to choose your preferred office location. Offices in Singapore are concentrated in the following commercial districts: Raffles Place Area, Marina Bay Area, Tanjong Pagar Area, Sheton Wan Area, Suntec City and Orchard Road Area. Central Area, Singapore’s central business district which comprises 11 planning areas, boasts the most expensive and sought-after office spaces. Many corporate offices of banks, insurance companies, and big tech firms are located in the CBD.
In suburban areas, there are concentrations of office buildings called ‘business parks’, where rental prices drop significantly. Companies which rent office space in these fringe areas benefit from being close to factories and distributors of certain industries.
Building grade
An unofficial ranking system recognised in the real estate world is the office building grade classification of A, B and C. These differentiate modern, spacious, well-renovated commercial properties from older, plainer buildings with few to no facilities.
On the higher, costlier end of the spectrum, Grade A offices are usually newly renovated, with opulently decorated lobbies, new HVAC like central air conditioning, building management, and nice facilities like parking lots. Buildings of this grade are especially desired by customer-facing enterprises.
Grade B offices have good quality technological and furnishing fit-outs, average management services, and facilities aren’t necessarily present.
On the lower end of the spectrum, Grade C offices have basic furnishings, outdated HVAC, and typically no useful building facilities.
Amenities
Amenities in the building, such as outdoor green space, fitness centres, F&B options, parking lots, and advanced building technology like touchless security, impact the cost of office rentals in Singapore.
According to industry experts, companies searching for new office space are also increasingly concerned with nearby amenities around the office. They see that employees value the ability to “grab a coffee or hit the gym at lunch” within a five minutes’ walk from their office.
Capacity and office size
Another important factor is your firm’s expected growth. If you plan to expand in the coming years, this should be considered in the size of the office you rent.
Traditionally, commercial contracts have been relatively uncompromising, requiring tenants to sign on for a minimum of two years and inflicting a fee for breaking contract. However, as more companies have come to expect the flexibility to scale up or down quickly in the wake of the COVID-19 pandemic, modern workspace solutions have risen to meet the need.
That’s why workspace in business centres, such as serviced offices, are ready-to-move-in and allow renting month-by-month. They usually also incorporate flexible floor plan. These qualities allow you to be more adaptable, if your team grows or contracts significantly, without having to worry about extra fees or an unhappy landlord.
Lease term and length
As mentioned, traditional office space in Singapore (bare rentals which you have to renovate, fit-out and furnish) require a minimum commitment of two years. Often, when you commit to a longer lease, you can negotiate a rental discount.
In business centres, where there are a range of office options to choose from including co-working space, hot desks, shared offices and private offices, you can rent starting from as short as a day or a month depending on the kind of workspace you go for. In general, business space rentals in executive centres are much more flexible.
What are the office rental prices in Singapore?
The most expensive commercial property is located in the CBD. The cost of Grade A office space in Singapore increased from S$10.74 per square foot in the second quarter of 2022 to S$11.06 in the third quarter of 2022. This was a 2.9% quarter-on-quarter growth. Rent in the CBD is expected to keep trending up, putting pressure on SMEs and start-ups.
| District |
Average rental rate (SGD) |
| 1 |
11.88 |
| 2 |
7.95 |
| 3 |
6.25 |
| 4 |
5.51 |
| 5 |
4.92 |
| 6 |
5.12 |
| 7 |
4.85 |
| 8 |
4.57 |
| 9 |
4.16 |
| 10 |
4.06 |
| 11 |
4.01 |
| 12 |
3.99 |
| 13 |
3.87 |
| 14 |
3.84 |
| 15 |
3.81 |
| 16 |
3.79 |
| 17 |
3.76 |
| 18 |
3.74 |
| 19 |
3.72 |
| 20 |
3.70 |
| 21 |
3.68 |
| 22 |
3.66 |
| 23 |
3.64 |
| 24 |
3.62 |
| 25 |
3.60 |
| 26 |
3.58 |
| 27 |
3.56 |
| 28 |
3.54 |
While traditional office rentals are calculated per square foot per month, which isn’t a straightforward way to calculate how much you need to allot in your budget (How much space does one employee need? Will this number grow in the upcoming months? How much extra space should you rent to account for future expansion?), the rental cost of a serviced office or business centre is calculated per desk. This is a simpler way for start-ups to calculate operating costs.
Plus, flexible workspaces offered in business centres generally have transparent pricing structures, with a flat monthly cost including the following:
● Furnished office space;
● business facilities like printers and scanners;
● communal areas like kitchens and conference rooms;
● and third spaces for socialising and collaborating.
Compass Offices has two business centres in Singapore's CBD providing a full range of workspace solutions, located in Samsung Hub and Singapore Land Tower. The price of flexible office rentals here ranges from S$400 to S$600 per workstation depending on the location.
Where to start
To get started looking for a new office in the Lion City, contact us to learn about renting flexible workspace that works with your planning. We provide a range of modern business spaces accommodating 1 to 50+ employees, ranging from shared offices, virtual offices and coworking space to fully furnished serviced offices. We can even work with you to create a custom workspace tailored to your specifications.
Conclusion
Singapore remains to be one of the key economic players in the Asia-Pacific region with a pro-business environment that hoists up local start-ups and attracts foreign companies. Compass Offices’ range of office spaces take advantage of Singapore’s geographic advantages, as well as its vibrant cultural scene in delivery its world-class workplace.
Further Reading