According to a research paper by Edmund Tie & Company, it is now estimated that by end of this year 2018, the total amount of co-working or flexible work spaces will hit around 1.4m sqft in Singapore, with a big part of this concentrated in the business district or CBD.  And as at May this year, there are approximately 110 serviced office cum co-working operators jostling for bigger shares in the Singapore office market. This comprises of both big brandname operators familiar to most from Justco (local), The Great Room (local), WeWork (USA), Campfire (Hongkong) to a whole plethora of local mid-sized operators making their presence felt here and in Asia.  What ensues is inadvertently a price war which can only be good news for those looking to rent.

In this article we will discuss the differences between renting a traditional office in Singapore versus that of taking up a private room in a service office, or that of a coworking space.  We will also discuss what we believe is the emergence of another hybrid office space category in what we call “co-location” office as Singapore landlords of traditional offices struggle to fill spaces in the face of this tsunami shift to flexible spaces over the next decade.

Table of Contents

1. Serviced Office Vs Traditional Office Rental In Singapore
1.1 What is traditional office rental?
1.2 What is the concept of serviced office?
1.3 Comparison between serviced office and traditional office
1.4 Cost differentials between serviced office and traditional office
2. Different Types Of Serviced Office Offerings In Singapore
2.1 Building type
2.2 Brand-name vs small operators
2.3 Comparison between serviced office and coworking space
3. Serviced Office Vs Co-location Office
3.1 What is co-location office?
3.2 Comparison between serviced office and co-location office
3.3 Cost differentials between serviced office and co-location office
4. Summary


1.1 What is traditional office rental?

Before this millennial workforce came about, most tenants be it SME or big corporates would lease a fixed square footage area of office spaces on typical a 3-year tenure for commercial leases.  This often requires careful planning and budgeting with 3-year forecast of all resources needed for business expansion in a specific country or location which is often difficult to do.  Once the space is commited, tenants would need to take over the space and spend on fitting out or renovation before moving in quickly and they need to see out the duration of the lease no matter what happens to the business environment.

1.2 What is the concept of serviced office?


Serviced office, on the other hand, requires much lower commitment both in terms of the duration of the lease as well as the costs required to fit out and even to maintain the business operations.  As the name implies, the office premise would be “serviced” by an experienced flexible space operator well adept to provide all kinds of business services needed from high-speed wifi, cleaning & washing, pantry supplies, printing solutions, office manager with a team of reception staff providing concierge services like phone answering, etc.

In fact, serviced office has been around for the longest time with very established players like Regus and ServCorp who used to command premium pricing with 2-pax private room going at above S$2,000 as recent as 2014.  It was only in the last two years when serviced office operators mushroomed in Singapore and the industry grew into a multi-billion dollar business globally as big corporates catch on to the trend of embedding coworking in their culture.

It is not difficult to understand why this is an attractive option not just for new startups and small businesses who may not afford the higher rentals in the CBD, but multi-national companies as well.  With fluid and ever-changing business environment as a result of technological disruptions and political upheavels in recent years, the flexibility of much shorter lease (often as short as 1 to 3 months) and not commiting on renovations and running costs is highly valued.  Enterprises could put in teams or whole departments and scale up or right-size at will, with no concern on lack of seats or over-commiting on a lease when business plans change.

1.3 Comparison between serviced and traditional office

Serviced OfficeTraditional Office
Length of leaseTotally flexible which can start from as little as 1 to 3 months; tenants could also “swop” over to another bigger or smaller room, or add on rooms as business progressesCommercial lease usually at minimum of 2 to 3 years with handover of a fixed committed space
Fitting out & re-instatement costs at endMinimal as all renovations are done with offie tables, chairs, phone lines and wifi/lan cable point all provided.  There is usually just a basic reinstatement fee at end of the lease which is in the range of $300-500.Can range from $20,000 (with partition for managers’ rooms) for 500 sqft small offices to over $100,000 for large spaces. It is an often-overlooked cost item which can easily add 30-50% to rentals when amortized over duration of the lease, especially for shorter lease of 2 years.
Ambience and décorMost operators provide a swanky reception area for guests and big spacious “breakout” and coworking areas which boasts of modern contemporary “living room” décor.  Some may even come with seaview!Private office rooms usually come with window (for the bigger ones) and glass fittings to allow for natural light.Most traditional offices are fitted out with simple carpet flooring and individual workstations on colored-panel system furnitures unlike the “open concept” in most serviced offices.Private rooms are usually whole-glass partitions with old wooden furnitures and wall cabinets.
Monthly running costsMost basic running costs are covered like internet access, electricity power and pantry supplies. However, most serviced office operators would charge for usage costs from phone lines, printing, to meeting room.All services need to be applied and contracted for specific periods from business broadband, printing, pantry supplies, etc.
Office ManagementAll tenants big and small can leave all office management matters to dedicated team of “centre managers”Depending on the size of tenants’ operations, they will need to have person dedicated or oversee all office management issues from suppliers’ contract, fixing repairs of lights or IT infrastructure, VHR (video camera), M&E issues, etc
Networking and collaborationServiced office tenants could easily mingle in common areas and collaborate when opportunities arise. This process is precipitated by the many networking activities and regular talks organized by the operators who would invite tenants or outside experts to give talks on business topics of interest.Most of the time tenants would keep all interactions within the confines of the company, ie. colleagues and coworkers.  Depending on the size and scale of operations, there would be team-building activities but not on a weekly or monthly basis unlike in service offices where there are resources dedicated to such events.

1.4 Cost differentials between serviced office & traditional office

Based on small unit 400 sqft for 5 paxTraditional OfficeServiced Office
Fitting Out Costs
SCDF approval for fire water sprinkler
M&E works (mechanical & electrical)
IT infrastructure (Cat 6 lan cabling)
Paritition (rockwool sound-proofing)
Carpentry work for cabinets/storage
Carpet flooring
Office furnitures (5 workstations)
PABX phone system (setup)
VHR system (video camera recorder)
Security access system
Install own invertor airconTotal fitting-out cost
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rentZero
Re-instatement Costs
At end of 2-year lease (estimated)

Monthly Running Costs
Monthly rental to landlord (with GST)
Utilities (electricity & water)
Business broadband 400mbps
Phone usage charges
Pantry supplies
Cleaning services
Repairs & maintenance including aircon service
Furniture & equipment depreciation
(optional) Hire 1 office receptionistTotal monthly running costs
(we will exclude depreciation costs which is paid for under fit-out & hiring of receptionist)
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent$4,100
True Total Monthly Cost
(amortized over 2-year period)
($40,000/24mths + $4200)
($1,000/24mths + $4100)

Although serviced office rental for 5 pax at $4,000 (~$3,800+GST) may seem to be higher than the rent of $3,200 paid (~$3,000+GST) to the landlord of a traditional office space of 400 sqft, when amortization costs for renovation and setup costs are factored in, it actually works out to be $1,725 ($5,866 less $4,141) less per month which saves the tenant a whopping $41,400 over the course of a 24-month lease!

And let us not forget management’s time involved to brief contractor, apply for permits, oversee renovation, requisite furnitures & fit-out items, contract for office supplies and services, etc.


2.1 Building type

As most of the serviced office operators are located in CBD area, and there are generally 3 types of office buildings within the CBD.  Take note there is no standard definition for commercial office buildings in Singapore other than the official URA’s definition of Category 1 & 2 office building with 1 being defined as those located in core business areas in Downtown Core and Orchard Planning Area which are relatively modern or recently refurbished, command relatively high rentals and have large floor plate size and gross floor area; and Catesgory 2 being defined as everything else other than 1.  Still the industry uses an average floor plate of around 10,000 sqft as the benchmark.


Premium Grade
Premium-grade office buildings are those located in Singapore’s CBD and with the following attributes:
– Usually newly-erected buildings, not just refurbished
– A grand and high-ceiling lobby reception area with state-of-the-art security access system
– Large floor plates of at least 10,000 sqft with no columns
– High total gross floor area with high occupancy
– Commands the top rental psf rate in Singapore and usually houses global MNCs and banks

Examples of serviced office operators located in premium-grade office buildings include:
One Marina – Justco
Marina Bay Financial Centre (MBFC) – Servcorp, Regus

Grade A
Grade A office buildings form the bulk of high-end office buildings in CBD as many building owners underwent extensive rebuilding or refurbishments in the last few years in Singapore.  These buildings are:
– Newly-erected or refurbished
– State-of-the-art security access system
– Large floor plates of at least 10,000 sqft

Almost all existing new or refurbished office buildings in the CBD fall into this category:
Suntec Tower – WeWork
Capital Tower – Collective Works

Grade B
Grade B office buildings are those older office buildings yet to undergo major extensive refurbishments however those floors occupied by serviced office operators would have been overhauled completely.  To draw an analogy, it is almost like one is walking into a “show room” unit within a block of old HDB flat:
– Older office buildings yet to undergo any or minimal refurbishments usually in the lift lobby area
– May or may not have security access control via entry passes
– Smaller floor plate sizes

Examples of serviced office operators located in grade B office buildings include:
71 Shenton Way – WeWork
139 Cecil St – Campfire

Shopping Malls
Besides office buildings, the trend of coworking operators entering retail malls have started overseas in markets like US and in Singapore local JustGroup started the ball rolling with its new premise this year 2018 opening in Marina Square mall.  The huge floor plate allows it to add on to its offerings by providing product showcase areas for its many new startups.  We expect this trend to further take root in Singapore especially in the upper floors of malls where there is getting harder for mall owners to fill the spaces.

2.2 Brand-name operators vs small operators

We have covered quite a number of top 10 brand names in serviced office and coworking operators by now.  Still, that is just 10-20% out of a total of some estimated 110 operators.  There are many other smaller serviced office and coworking operators and some with only single-location like us here at StartWise.

Smaller operators are unable to match the depth and width of the membership base and networking activities of the big boys.  Nor can we compete on the extensive interior design budget and big spacious floor plates offered by these Tier 1 and some global operators.

However, as in all trades of life, small has its advantages and besides pricing power, we are able to fulfil certain unmet niche in the market place and we will elaborate more in a later section on a new trend we believe will arise over the next few years.  Before we do that, we need to take a closer look at the difference between what is a serviced office and what is a coworking space.

2.3 Comparison between serviced office & coworking space

So far, we have used the term “serviced office” loosely in this article when we really mean “coworking space” at times.  It is important to note that the two terms refer to two different office products but is used interchangedly somewhat by the industry as almost all serviced office operators would also provide coworking solutions and vice versa.

As explained earlier, serviced office as a product has been around for ages and our guess is that is still going to be pretty much the preferred choice for all tenants when budget is not an issue.  Renting a serviced office means taking up a short lease of one or a few private rooms (usually with window) that could sit a few coworkers in each room. There is a sense of ownership of the space with private restricted access, soundproof glass partitions where conversations are conducted exclusively.  Customers or business partners who come down for quick short meetings can be hosted in the company’s exclusive area.

On the other hand, coworking spaces which is also known as hot-desking to some, are more suited for freelancers or those in creative and media industries where collaboration is valued more.  That is not to say that those in such trades will not take up private office rooms.  It depends.  For those who just started out and wish to keep their fixed costs down, coworking memberships where one is free to use any available open seats during business hours for a small fee per month or per day may work best in our opinion.  The only draw back is it is perceived as a less “corporate” or business setting for work and may not be suited for certain industries. Typically, tenants would request to have a fixed dedicated desk zones so as to enclose the whole team within the same area.

Media has propagated the term “coworking space operators” not only because it ties in with the whole concept of the sharing economy and the rising army of freelancing millennials which is all the buzz now; but it gives a sexy appeal to the whole idea of an office.  Still from evidence we see on the ground, serviced office continues to form the main bulk of businesses for most of these operators especially in the enterprise segment.  Perhaps a better word to describe both office space solution providers in the same breadth would be – flexible space operators, which would encapsulate both serviced office and coworking space rental.



3.1 What is co-location office?

With serviced office operators taking over commercial buildings in Singapore and with this growth rate projected to rise annually in double-digits 20-30%, traditional office landlords be it building owners or strata-office owners would find it more and more difficult to fill their spaces as millennials and even enterprise tenants take to such flexible spaces.  The demand for traditional offices has shrunk and will continue to be so.

Fortunately, we do see an unmet niche for traditional office owners who could lease out their premises as co-location office rental through management contracts with co-location office operators.  So, just what exactly is co-location office?

There are many smaller tenants or startups who may like the idea of renting a serviced office with prime business address in CBD but is sensitive to the steep pricing charged by major operators which range from $1,000 to $1,600 for a 2-pax private room.  They might like the idea of a hybrid concept between a small traditional office without all the “frills” of coworking bells and whistles, yet still enjoy the flexibility of a serviced office short-term lease rental with all basic business services provided.  Think of it like a budget airline without all the frills of a full-serviced carrier, but still get you from point to point safely and efficiently.

As the name implies, co-locating offices refers to the setup where the entire small office space is essentially occupied by just a few tenants (like 5 to 8) in non-conflicting businesses who decide to co-locate their operations and share out common resources.  There will be an operator who takes care of the basic services like mails, calls, internet access, small pantry supplies, cleaning etc.  Yes, there may not be that swanky reception area with free coffee and tea but if it helps to bring down overall rental costs by some 25-30% per month, that makes perfect sense for tenants who rather spend the money on marketing to get more new businesses.

For example, in the cost comparison given earlier in section 1.4, co-locating offices into 2 private rooms for 5 persons will cost only $3,000 all-in inclusive of gst at StartWise, which is at 27% lower cost from $4,100 monthly running costs.   And if your company needs only a 2-pax room with window, this all-inclusive cost is at just $1,360 per month and takes care of all your daily business needs from printing, meeting to phone usage.

3.2 Comparison between serviced office & co-location office

Co-location OfficeServiced Office
Length of leaseTotally flexible, but subject to availability of rooms and desks due to the smaller scale
Totally flexible
Fitting out & re-instatement costs at endNo fit-out costs. Only re-instatement fee as low as $100 per paxNo fit-out costs.  Only re-instatement fee usually $300-$500 per room
Branding & ambienceSimple reception area with no spacious feel but can come with modern contemporary look.With few tenants co-sharing the common space, corporate branding is much stronger with logo signages at entrance for guests. Tenants could also portay themselves as related or affiliate companies aligning for the same vision or purpose.Big swanky reception with modern contemporary look and feel.  Spacious coworking space.Due to the size of operations, it will be difficult not to be seen as one of the many tenants in a coworking setup. Corporate logo displays are chargeable by month and get overpowered by the distinctive brand of the service office itself.
Monthly running costs Depends. Operators could charge by usage of meeting rooms, printing, etc. but most would include all services in the rent so as to differentiate from service office.Smaller operators typically has no GST, or choose to absorb it as part of the all-inclusive rent.Most do charge by usage with the exception of a few players.  Charges will be levied for meeting room bookings (hourly rate), printing, displaying of logo, snacks and premium coffee like nespresso.  Some would even decouple business address as a service from basic rent and levy a fee for that.Rental price listed normally excludes GST. 
Office ManagementUsually small operators can only provide a single receptionist to take care of all day-to-day office admin matters.
All tenants big and small can leave all office management matters to dedicated team of “centre managers”.
Networking and collaborationNo regular hosting of events and talks.Regular talks and events from business seminars, workshops, after office hour parties to even yoga and dancing classes.

3.3 Cost differentials between serviced office and co-location office

The main cost differentials between serviced office and co-location office, other than the lower rent, is in the pricing for services by use.  As most co-location office operators are small setups with less than 10 tenants, it does not make economic sense to track and charge by use.  As highlighted, it makes more strategic sense to include all usage costs into the rent itself, be it phone calls to meeting room bookings.  It will difficult to breakdown and provide itemized charges to individual tenants, albeit there are solutions or platforms in the market that allows for it.

The other obvious cost advantage for co-location office over serviced office comes in the form of lower rent charged.  This is possible as co-location office operators keep all running costs down to the bare minimal by doing away with all the frills like free coffee and tea. They also do not need to breakeven on high fixed rental costs as there is no necessity to provide that spacious look and feel which means every sqft in the lettable space will be optimized. It will not take too long for them to fill the limited no. of rooms and seats.


In this article we have introduced you to the various types of flexible work spaces from serviced office, coworking or hotdesking, to co-location offices. The last of which is what we anticipate as a new hybrid category of office space that provides flexible solutions yet giving a stronger business identity and corporate look and feel. It would also target at the more budget-conscious segment of tenants out there with rents set at average of 25-30% lower than those of serviced offices.

We have also provided realistic cost breakdowns to estimate the potential savings a small business tenant with less than five staff would reap if it opts for flexible office space (serviced office or co-location office) over that of a traditional office rental.  And this figure can be quite staggering over a period of 2-year lease.

We hope the information provided here will be of great relevance to your search process.  As this article is essentially an opinion-piece from an existing co-location office operator, we ask you to validate the figures and statements presented though every effort has been taken by us to ensure its accuracy and objectivity.  Please also do read our disclaimer clauses at the end of the article.

Speak to us today to find out more and to arrange for an obligation-free viewing of premises.  We look forward to welcoming you to the StartWise family.

Though every effort has been made to ensure the accuracy of our writing and analysis, we do not warrant that our research findings will be 100% true and unbiased as we are also in the business of operating a co-location office in Singapore ourselves.  We stand corrected and welcome any such feedback to  Through our blog, we aim to summarize useful information on office rental market in Singapore and to bring you coverage on interesting developments in the industry.  We also express our opinions in our writing which must not be taken as facts without validation or further checks.  Our sources of information will be limied to those from the authorities, and whatever that is published in the public domain as well as insights gathered from our day-to-day marketing and operations in our business.  You should not base any decision on any representations given in any of our blog articles without fully verifying the said information with the relevant parties concerned and we cannot be made liable for any losses suffered as a result.

It is now estimated that the number of serviced office cum coworking space operators in Singapore has mushroomed to more than 100 with the total floor area amounting to over 1m sqft and growing fast.

As competition rises and the going gets tough, we have noticed a drop in prices by some operators with many dangling a low base price but that comes with many additional “add-on” charges even for the most basic of all services – the use of the business address!  In the face of such cut-throat competition, more experienced and bigger operators have turned to being a differentiated niche player, in order to stand out and fill up all the spaces – a clever move.

In the past few years we have seen operators focused on various niche market themes from fitness industry (Core Collective), childcare (Trehaus), hospitality (The Great Room) to the ever-trending young tech startups (Hackerspace, Hubquarters, Carrot Patch).  Operators offer the usual hotdesks and coworking seats with monthly rate and rates for daily access pass.  What is unique is often the décor and fittings of the office space that plays to the profile of target market from fitness training facilities like gym & treatment rooms, children play room, to arcade games machines and console.

Young startups and small businesses are indeed spoilt for choice today with the diversity of offerings from various serviced office operators in Singpore, and at hugely affordable prices compared to five years ago when serviced office market in Singapore was dominatd by a few major players the likes of Regus and ServCorp with the typical corporate style office suites.

One of the key benefits advocated by many of these serviced office operaters in Singapore is the element of networking with like-minded entreprenuers in the same or related industries, and other founders in similar life stages for example new parents with young kids. Depending on the type of industry one is in, this networking opportunity may indeed bring about new businesses for some, though by and large many companies will still need to do their due diligence when sourcing for products and services. 

O.M.O or “one-man-operation” business owners renting hotdesk or coworking seats will clearly benefit from the camaraderie of working in such a vibrant environment with many other “colleagues”.

At StartWise, being a small setup with just two private suites and four dedicated desks, we may not be able to offer that extensive reach and network of the big boys.  However, we more than make up for it with our support services and features thrown in free of charge from the use of meeting room, printing, unlimited free calls from a dedicated phone line with free call transfer to mobile, display of corporate logo branding at the office reception, and so on.  Over time we do hope to expand our base of clients through our unique training programmes targeted at startups and new businesses which will help to expand our network.

Speak to us today to find out more and to arrange for an obligation-free viewing of premises.  We look forward to welcoming you to the StartWise family.

Though every effort has been made to ensure the accuracy of our writing and analysis, we do not warrant that our research findings will be 100% true and unbiased as we are also in the business of operating a co-location office in Singapore ourselves.  We stand corrected and welcome any such feedback to  Through our blog, we aim to summarize useful information on office rental market in Singapore and to bring you coverage on interesting developments in the industry.  We also express our opinions in our writing which must not be taken as facts without validation or further checks.  Our sources of information will be limied to those from the authorities, and whatever that is published in the public domain as well as insights gathered from our day-to-day marketing and operations in our business.  You should not base any decision on any representations given in any of our blog articles without fully verifying the said information with the relevant parties concerned and we cannot be made liable for any losses suffered as a result.

Last month, MOM (Ministry of Manpower) released its labour market advance statistics showing a slight uptick in the number of retrenchments in the 2Q 2018 rising to 2500, from 2320 in the 1stquarter of the year, reversing the general downtrend since the last quarter of 2016.

It was also reported that although overall economy expansion has drawn more people into the workforce thus overall unemployment rate edged up from 2% to 2.1% (for Singapore citizens this is 3% to 3.1%), this expansion is not across the board and uneven across industries.  The sectors shedding staff in 2ndquarter come largely from manufacturing, oil & gas, transport engineering and construction materials.


There is still structural problem in the form of mismatch between what employers are looking for and the skill sets needed to fill new job openings.  As we move deeper into the digital economy over the next 10 years, we believe this gap will continue to widen as more PMEBs who are finding it hard to retrain themselves for the new jobs created will struggle to get re-employed upon retrenchment.  Of this group, we expect more to take to starting new businesses.

Will this small segment of demand help to spur demand for office space for rent?  Yes we think, especially for small serviced office and coworking operators.

The global explosion of demand for coworking and serviced office space in the last few years have also seen frantic expansion by many office space operators in Singapore.  And this trend accelerated further this year with the arrival of global coworking space giant WeWork on our shores, who opened their first centre at beach road last Dec and has quickly scaled up to four centres within span of a year.  Regus, an old hand in the traditional serviced office for rent business, has also quickly morphed into a hip and vibrant coworking operator in recent years.

Driven initially by the gig economy, coworking space has taken the world by storm and more multi-nationals are also looking at such flexible options for new markets.  However, such coworking setup may or may not be suitable for all startups, especially those whose business require more privacy and where dedicated office as a sign of reliability is important to clients.  The general impression still remains that a coworking environment is more suited to firms who are new and in certain industries especially the creative, marketing, sales and where work requires a great deal of collaboration.

There are of couse private room office space for rent in these global outfits from WeWork, Regus, and many others.  But these private suites do not come cheap from the big boys, plus they tend to have bigger private rooms for 3-4 persons. Retrenched middle-aged professionals looking to start their own practice in their respective fields may be better off starting at a lower cost base by exploring the myriad of smaller office space operators where they might be able to offer smaller 1-2 pax private rooms. The price difference could add up to 20% savings when one factors in the overall costs including gst (from bigger operators), phone lines, call usage charges, booking fees for meeting rooms, etc.

At StartWise, we do offer what we believe is reasonably-priced 2-pax private room office space for rent, as well as dedicated desk, that comes with what all businesses really need, from free use of meeting room, free calls from a dedicated office phone line, to free display of corporate logo at the office reception.

Speak to us today to find out more and to arrange for an obligation-free viewing of premises.  We look forward to welcoming you to the StartWise family.

Iras has just released the official figures for performance of commercial office market in Singapore ending in 2nd quarter 2018.  Here’s an overview:


The overall picture is a positive one for office landlords in Singapore with slight drop in vacancy rate as well as continued pickup in both the price index (for buying and selling) as well as rental index.  For this article we are more concerned and will take a closer look at the latter, where average rents have increased by 1.6% over the preceding quarter.


We are also more concerned with rents in CBD of Singapore.  As evident from the trend line, the office rental market in Singapore’s Central region has passed the doldrums over the last 4 quarters since the lowest point in 2Q 2017.  We do see some slight plateauing in the lastest quarter but clearly we are far from the last rental peak of 190 index back in 2015.  As URA does not capture the rents of coworking operators, we suspect this plateauing effect we are starting to see from the 2nd half of 2017 could well be due to burgeoning of flexible office space operatings especially in CBD area, where entire floors are rented from building owners at a “discount” from market.  With supply taken out from office rental market in bulk, as URA also reported an increase of 74,000 sqm (nett) of occupied office rental space which is a big jump from  just 14,000 sqm (nett) in the previous quarter, we would expect the overall supply to continue to fall in the meantime aas well as vacancy rate to continue its slight drop over the next few quarters.  See trendline below.

What this means is that tenants who are renewing and coming into the office rental market would expect to pay slightly more on rental reversions with the landlord or to move to a whole new office.

Another factor that will continue to exert upward pressure on rent is the need for REITs building owners to price in higher rental reversions going forward with a rising interest rate.  Tenants whose business model are strong and sustainable would do well to lock down longer leases in the current market, but this is not without risk.  Coworking space might provide the ideal solution for businesses to scale up or down but with a minimun pax of seats secured on longer leases for a core team of staff.

Office tenants looking to rent can take reference from the psf rentals achieved in 2Q 2018:

Note that URA defines Category 1 office space as those in buildings located in core business areas in Downtown Core and Orchard Planning Area, and which are relatively modern or recently refurbished, command relatively higher rentals and have large floor plate size or gross floor area.  This would largely capture all Grade A and Premium office space in the CBD/Orchard.  Further URA then lump all other commercial spaces outside of Cat 1 and across the entire island of Singapore as Cat 2.

Office tenants could use the indicative benchmark of approximately 2-3 times the unit psf rent to assess coworking or serviced office operators who needs a much higher margin to provide for office services and renovation and repairs.

This report would not be complete without a look one critiecal factor that could derail the current uptrend in rentals – supply in the pipeline.


With the main bulk (around 200,000 sqm out of total 725,000 sqm under construction or with planning approval granted as at 2Q 2018) of new office rental space to hit the market by 2020, there is a possibility of a softening in rent.  Still we expect there could be delays in construction, and the likelihood that many existing office landlords would have stretched rent reversions beyond this point to secure longer leases, that scenario may or may take place.  This is especially true in a global economic recovery led by the US in the past one year which may see bustling economic activities and new investments spurring more and more coworking spaces and serviced offices in the coming years.  In short, the demand might prove too strong and mop up any new supply quickly, especially for newly-fitted offices.

If you are a small but growing setup with the need to be located close to your customers in Singapore’s CBD, why not consider having the best of both worlds in office rental – with the exclusive branding of your “almost wholly-owned” office unit, yet retain the flexibility of scaling up and adding workstations as and when needed.

Speak to us today to find out more and to arrange for an obligation-free viewing of premises.  We look forward to welcoming you to the StartWise family.