Commercial property leasing procedures varies from country to country. Whether you are a newly set-up company or foreign company looking to set up a presence in Singapore, may this Office Leasing Guide provide a better understanding towards the common practices in Singapore. Hope it can assist you better in the process of sourcing and ultimately securing your business space.
One point to note is please ensure that you have the necessary approvals, licences and permits from all relevant authorities before you carry out your business operations in Singapore.
The Planning, Sourcing, and Execution Process of Commercial Property For Lease
- Planning Your Requirements
Planning is key when sourcing for commercial office for lease because it involves the important function of business operations and well being of the employee too.
Some fundamental considerations that need careful review before embarking on your office rental search:
- Location – This is one of the most important factor which can contribute to the smooth operation of the business
- Size of office space – This depends on the number of employees in your organisation. Evaluate long term and short term plans such as the need for additional office space for expansion or projects tenure.
- Timing to commence the office lease term
- Rental Budget
- Lease Term – Think of it as consumption of renovation works done and whether it’s sufficient to hedge operational costs. Some tenancy agreement will cater for increase in rental (capped at certain limit) upon renewal.
- Other requirements such as security, technical requirements, IT and communications infrastructure, etc
- Reviewing OptionsWith the above checklist, you can begin the search for commercial office for rent. You can either liaise with the landlord directly or appoint an agent to assist you to navigate the suitable options in the market. Please ensure you have enough time to perform the sourcing, actual visitation to site, shortlist options and finally make the decision.
Prior to signing the tenancy agreement, you should consult a contractor or interior designer to help in the planning the working space. Efficient planning of the layout, renovation works required, electrical power requirements, and balancing all those with the financial budget set aside for office rental. The contractor can perform a ‘test-fit’ of your shortlisted choice (s) to ensure the space you are leasing are able to be used efficiently. - Negotiation and Signing of the Tenancy Agreements
- Letter Of Intent (LOI)After you have identified the suitable office space, your appointed property agent need to submit a Letter of Intent (LOI) to the Landlord’s representative, indicating your interest in leasing the space. The LOI should state the key lease terms such as date of possession, date of lease commencement, rent-free period, lease term, gross rent, other costs (e.g. stamp duty and admin fee payable) and other important information such as specific requests. With regard to office rental rates, your appointed property agent should be able to provide you with a comparative market analysis (CMA) to show you the current pricing of commercial property for lease in the shortlisted area. It will be useful for you to know such information in order to make a correct offer that is beneficial for both parties. You can also request for a rental free period to fit-up the office before actual move-in date. Your property agent will be able to negotiate the rental price, terms and conditions that are suitable for your company.
- Letter Of Offer (LOO)Upon receiving the LOI, the landlord will usually conduct a background check on the company profile and paid-up capital. The tenant typically must produce a copy of their Company Registration certificate with the Accounting and Corporate Regulatory Authority (ACRA), the Memorandum of Articles, and company’s board minutes of resolution to execute the lease prior to signing the lease/tenancy agreement. Once the landlord is satisfied that the company is financially sound and both parties have agreed on the basic lease terms, a Letter of Offer (in duplicate) will be issued by the landlord along with the specimen Tenancy or Lease Agreement document for your execution (stamped and authorised signatures). To confirm your acceptance to the lease terms, you will be required to return the signed copies of the Letter of Offer together with the security deposit, stamp fee, admin fee, and one month’s advance rental.Upon signing the Letter of Offer and the deposit and advance rent made, the office premise will be reserved. Your company will be bound by the contractual obligations under the lease. The landlord will also proceed to stamp the Letter of Offer and return 1 signed copy of the Letter of Offer together with the stamp certificate to you.
- Tenancy Agreement After the acceptance of the Letter of Offer, you will be given a lease or tenancy agreement prepared by the landlord’s solicitors for your execution. The lease/tenancy agreement is based on the same terms and conditions specified in Letter of Offer stage. It indicates the terms and conditions that generally applies to all tenants in the building. In Singapore, most commercial landlords adopt similar terms and conditions that are relatively simple to understand. However, you may seek professional legal advice at your own cost. Do note that as a common practice, the legal fee in relation to the preparation of the lease/tenancy agreement by the landlord’s solicitors is also paid by you. Any major changes to the standard terms and agreements of the tenancy are normally not entertained by these commercial landlords.
- Take Over and Fitting-OutPeriodAfter the lease/tenancy agreement has been duly executed and all necessary sums such as security deposit & stamp duty paid, you will take possession of the property on the Date of Possession indicated in the tenancy agreement. The renovation or fitting-out work can be carried out. The commercial landlord normally requires submission of all plans and specifications of the proposed renovation works. Relevant authorities approval if necessary should also be obtained before you can proceed with the renovation. You will also need to contact relevant service providers for getting connections such as utilities, telephone, internet, etc.
Once you have completed your fitting-out works, you can move in and commence your business operations.
We hope that this commercial property leasing procedures guide can help any newly set-up company or those who are looking to relocate / set up a business presence in Singapore. Please do not hesitate to call us at +65-82001937 should you require any help to source for a commercial office for rent.