Pros

Cons

Comes fully furnished and equipped

Low capital expenditure

Higher accessibility

The office is managed by specialised companies and is fully equipped with amenities such as reception, IT infrastructure, mail support, internet connection, printing services, meeting rooms, office cleaning, pantry and more. This makes working conducive. Furthermore, conference rooms and meeting rooms which were previously too expensive can now be made accessible on a pay-as-you-use basis.

Since they are available immediately and require low capital expenditure, there is no need to plan out long-term rental finances. In fact, the rent can be fixed on a monthly basis for more flexibility. This also allows you to take up more or less space as you scale up or down. This makes business centres popular with startups, particularly those with unpredictable growth, or those operating in an unstable market.

As the office is located in the CBD area, it is easily accessible by both employees and clients. Choosing one that is close to the MRT can be very helpful too. Beyond convenience, the prestigious business address can also generate more credibility for your business.

High rental cost

Higher costs in long run

Shared amenities may result in inefficiencies

For the conventional office with all these amenities, rental prices can be steep. Depending on the location, a business centre that can house around 3 employees can cost between SGD$2,000 to SGD$3,000 a month, with add-on facility costs ranging from SGD$20 to SGD$50 an hour. Evidently, for conventional offices while the initial capital required is low, costs do add up and can be expensive in the long run. This makes business centres a good temporary rental option as opposed to a long-term one.

As resources such as meeting rooms are shared amongst the various tenants, there is a need to book the facilities well in advance. You may also need to queue and wait to utilise common resources such as printing services. All these can become a hassle over time.

Freedom to refurbish and renovate

Lower cost in the long run

Longer tenures

Conventional offices give you the freedom to design the space within the rental guidelines. With that, you have more control over the overall look and feel of your office by using your unique corporate colour scheme, incorporating your mission and vision, doing up the pantry according to employees’ tastes and preferences, naming your meeting rooms according to your core values and create your own office layout. By customising the overall aesthetics, not only will employees feel more at home, but clients can also form a better impression of the company.

While the initial capital outlay required is high, it can actually be less costly in the long run. In fact, if you don’t have to meet your clients in the office, there is no need to spend too much money on furnishing. A bare-bone office can prove to be even more cost-effective.

In contrast to business centres, traditional offices offer extended lease tenures, providing a heightened sense of stability and security for businesses. Moreover, lease renewals often come with predetermined rates, contributing to a predictable cost structure. This long-term commitment provides peace of mind, as the likelihood of relocation in the short term is minimal, minimising potential disruptions to daily operations. This assurance allows the team to concentrate on advancing the business without unnecessary distractions.

Long minimum lease periods

High capital expenditure

Additional costs may be incurred

Typically, private office space rentals require a minimum lease which spans over two years. This can be too big a risk for startups in an early growth stage when survival and expansion are both unpredictable. There is a need to handle various business-related operations including phone answering, utilities, IT maintenance, housekeeping and more. Researching, sourcing, shortlisting, and deciding on the perfect building can be challenging. There may also be a need to hire an agent for this as negotiations on lease terms take skill and time.

With an empty office, there is a need to spruce up space with a set of utilities, IT infrastructure, furniture and more. Business-related operations such as phone answering, maintenance and housekeeping will also need to be handled by the company.