When planning to rent an office in Singapore, property portals such as commercial guru compare prices of offices on a per square foot basis. But, computing for the true cost of rent is more complicated than one metric. There are a few questions to ask to understand the full breakdown of costs in renting an office space.
Of course, rent makes up the largest cost, but it is vital not to overlook other factors that make up the rent.
The 6 questions about Singapore office costs are:
1. How much are office rents in different locations in Singapore?
Rents vary depending on location and office type. As of October 2020, rent averages S$ 5.50 to 6.00 psf for office space in Singapore. District 1 (Marina, Raffles), being the most expensive averaging 8.25 to 9.50 psf.
Apart from location, the other factors affect office leasing rate in Singapore, include the grade of the building (i.e. grade A, grade B and grade C buildings), age, maintenance tenant mix and available amenities.
2. What are the main recurring costs involved in renting a Singapore office?
In some cases, rent makes up 50 to 70% of the running cost. Most tenants find themselves cash-strapped at the end of the month with the extra expenses. The 3 main recurring costs to rent Singapore office space are:
- Maintenance Cost
- Utility Charges
Tenants are usually responsible for paying utilities– e.g. electricity for air conditioning, refrigerator, computers; internet costs; SP cost which includes water and rubbish disposal.
Utility charges for a small office with less than 10 people should range from S$300 to 500
Tenants would also have to bear maintenance cost of the cleaning lady, aircon maintenance, handyman services for the occasional upkeep. This alone will cost a few hundred per month!
3. What are some of the one-off costs before a tenant rents Singapore office space?
- Fit-out costs and deposits
- IT, telecoms, networking costs
- Stamp duty
- Other services engaged such as movers
A tenant can spend thousand to renovate, depending on the furniture and décor of the office and the number of people occupying the space
4. How much does it cost to fit out an office?
Fit-out costs will depend on the level of work required. The cost can be between SGD 40–90 per ft2 for bare units that need partitions, aircon, lights and furniture. A bare unit of 1,000 square feet (ca. 93 m²) can cost a tenant 40K to 90K.
Semi-fitted office space which includes some fit-out such as —partitions, aircon, decent flooring could SGD 10 – 40 per ft2. Most of the cost would be to buy furniture, wire internet, paint the walls, decorate and make it presentable to clients.
A landlord often requires a renovation deposit (ranges from S$1000 to S$5000) before any works can be carried out. This is the cost of rectifying damage to the building caused by the tenant’s contractors. Upon completion of renovations the deposit is refunded, less any deductions.
5. How much does it cost to reinstate an office?
At the end of a tenant’s lease, landlords require tenants to reinstate back their property to the original condition as stated in the contract. A contractor will reinstate the leased office to its original state by removing the tenant’s fit-out, partition and repainting.
A typical reinstatement job requires:
- Removing partition, floor finishes and false ceilings
- Removing existing office furniture, cubicles, workstation
- Repainting the walls to the original colour
- Terminating power points and removing wiring, trunking, cables and data points installed in premises
- Relocating and reinstalling power points the original lighting
6. Is GST paid on rent?
Generally yes. Most landlords are GST registered, so GST is payable on rent and services but not on deposits.
So is it worth renting a private office in Singapore?
In conclusion, the per square foot basis of comparison does not reflect the true cost of renting an office in Singapore. Recurring, fit-out and reinstatements costs are generally overlooked.
For shared office spaces, monthly fees might be a bit higher, but, as a tenant, there is surprise cost.
At We Share Offices we have private offices suitable for a variety of Start-Ups and SMEs in trades such as e-business, logistics, publishing, packaging, media, manufacturing etc. All fixed costs of our office are covered, such as electricity, water rates, air conditioning, aircon maintenance and common area cleaning is included in a monthly payment and the tenant only pays for the space needed.
There are a variety of business services that our tenants can opt for such as corporate secretary, accounting and strike off. Smaller business outfits are attracted to the concept of shared spaces. Typical savings for shared spaces are 44% to people for three months and 66% for small teams.