How to choose business premises in Singapore

Dr Biz • October 26, 2020

Good business premises, like good business partners, can be hard to find. Like so much of Singapore’s economy in 2020, the commercial property market has also been radically transformed by the Covid-19 pandemic, with sales and rents down as businesses have been forced to close for short or extended periods.

According to recent data, Singapore office rents saw their steepest decline in 11 years between July and September, down 4.5%. On the flip side, however, commercial sales are picking up, with a Knight Frank report showing a strong uptick in sales in Q3, with transactions totalling around $4.4 billion (although this is still down 55% year-on-year). There are also some bright spots in Singapore’s shophouse market, with recent sales recorded in River Valley, Bugis and Telok Ayer as the market recovers after months in the pandemic doldrums.

For the canny business owner, this period of falling rents and rising investment demand for commercial property could present an opportunity to find the ideal business premises, perhaps in a bigger space or better location. If that sounds like you, we’ve outlined a few key things to consider when looking for the perfect place to host your business operations in Singapore.

1. Location, location, location

Much like choosing your home, choosing the right business premises has a lot to do with where it is located. Access to public transportation like an MRT station is a key consideration, and is in fact one of the prime criteria for a commercial property investor. Of course, the better the location, the higher the rent, so there may be a trade-off to be made here, but even if you are not a retailer relying on footfall, access will be important to staff and visiting clients so choose wisely!

2. Do your research

Whichever location you choose, it is essential that you do your research: don’t just take your agent’s word for it! Make sure to take a good look around and get to know local business owners. Not only can you (hopefully) pick their brains to find out how much rent they are paying, but you can try to get a sense of the type of customers that frequent the area to see if your business matches up. Again, this isn’t just important for retailers: if you are a young tech start-up, being surrounded by similar companies and entrepreneurs could lead to valuable future partnerships.

3. Condition of the building

A big mistake some business owners make is to be over ambitious when it comes to renovations. While every company wants to make their mark on their space, doing a lot of work on a building can be extremely costly and typically always runs over time and budget. And so, when you are looking at new business premises, unless you have endless funds you should ensure that it is structurally sound and does not have any major issues with pipework or water access. While some of these issues may fall under the responsibility of the owner, you will have to live with them as you wait for repairs.

4. Mind the taxes

Few business owners buy their business premises these days. If you do, however, there are a number of taxes that you might need to pay. These include Property Tax of 10% of rental value per year. For 2020, the government is giving a Property Tax rebate of up to 100% for many Singaporean businesses, but this is likely to remain a temporary measure. Other taxes to watch out for include Goods and Services Tax (GST) of 7% on the purchase of the property if your company is not GST registered, as well as Stamp Duty of 15% on the sale of industrial properties. If in doubt, get in touch with Dr Biz - we do taxes!

5. Plan a good party

There are so many things to consider and plan for when moving into new business premises - especially if this coincides with the launch of a new business. This means it’s important to take care of the details, and again this is certainly something Dr Biz can help with, whether it be incorporation, accounting, payroll or corporate secretarial. However, it is also important to have fun and celebrate all of your hard work and future success, so make sure you throw an opening party to remember.

< Older Post Newer Post >