What to take note in renting an office space in Singapore?
Commercial & Industrial Properties Singapore - Sales & Rental
(65) 6100 8123
Renting an office unit involves careful consideration of several key factors. Here are some points to note:
- Caution in the use of Office in an Industrial Space:
- The Urban Redevelopment Authority (URA) mandates that at least 60% of the total floor area in an industrial development should be allocated for core industrial activities.
- Ancillary activities, including offices, staff canteens, and showrooms, supporting the primary industrial functions, can collectively occupy up to 40% of the total floor area.
- Rental and Service Charge:
- Rental rates are typically expressed as gross rent in Singapore dollars per square foot per calendar month (S$psf/mth), comprising Base Rent plus Service Charge.
- Tenants are generally required to pay rent on a monthly basis, and this amount is subject to Goods and Services Tax (GST).
- A Service Charge, usually ranging from S$1.00 to S$1.30 per sq ft per month, may be imposed to cover centralized air-conditioning during office hours, maintenance, security of common areas, and other building-related expenses. Adjustments may apply based on changes in maintenance costs.
- Lease Period:
- The standard lease period is typically two to three years. However, negotiations for longer leases are possible for multiple floor tenancies or anchor tenants.
- Leases extending beyond seven years are required to be registered with the Singapore Land Authority.
- Option to Renew:
- The option to renew is generally for a period of two to three years and is typically subject to agreement on the rent or its review based on prevailing market rates.
- Rental caps, though not commonly practiced in Singapore, may be agreed upon between the tenant and the landlord in the Lease Agreement.
- Fitting Out Period:
- The fitting-out period is the duration between the Possession Date and the Lease Commencement Date, allowing tenants to renovate their new premises.
- Depending on the size and prevailing market conditions, this period can vary from two weeks to three months. During this time, landlords often waive the payment of the Service Charge, although exceptions may exist.
- Security Deposit:
- A security deposit, usually equivalent to three to six months of gross rent, is payable upon lease confirmation. This deposit is refundable (without interest) at the end of the lease.
- The specific amount depends on the financial standing and paid-up capital registered under the Accounting and Corporate Regulatory Authority (ACRA).
- Letter of Intent (LOI):
- The LOI is a non-legally binding document outlining the principal terms and conditions negotiated by both the tenant and the landlord.
- The landlord responds to the submitted LOI and may propose counter-terms.
- Letter of Offer (LOO):
- After mutual agreement on the main terms and conditions, the landlord issues the legally binding LOO and a copy of the Lease Agreement, detailing all terms and conditions.
- Upon agreement on the details, the tenant signs the LOO and pays a booking fee equivalent to one month's rental (subject to prevailing GST).
- Lease Agreement:
- The landlord's legal counsel presents the tenant with the Lease Agreement, outlining the terms and conditions agreed upon in the LOO
Commercial & Industrial Properties
CosySingapore.com
Connecting People with the Right Space
We look into industrial and commercial properties in Singapore. Contact us for honest, informed advice on commercial and industrial property solutions
QUICK LINKS
CONTACT
Desmond Tan
Licensed Real Estate Consultant
CEA Registration No: R007497J
Phone: +65 6100 8123
Email: Cosysingapore@gmail.com
Web Site: www.cosysingapore.com
Office Hours:
Monday – Sun: 8:30am – 8:00pm
Public Holidays: By appointment
All information is provided in good faith based on available project data and is subject to change by the developers or relevant authorities. Floor plans, specifications and prices are indicative and subject to final confirmation. This page does not constitute a formal offer. Buyers are advised to conduct independent due diligence and seek professional legal advice before making any purchase decision.