On a pure price per sq. ft basis, serviced offices ARE more expensive, but this additional cost is often outweighed by the fact you are paying for just the space your business needs. Serviced office rates also exclude common areas like meeting rooms, corridors and the pantry, which easily takes up 40% more space and needs to be factored in traditional leases, so your actual sq ft needed in serviced offices is much less, and so is your total rent.
In addition, serviced office rent includes almost all of the hidden costs that you would normally expect to pay on top of rent in a traditional office – like business rates, stamp duties, light, water & power, security, cleaning, building & plant maintenance, insurance, broadband internet, etc. Neither are there charges for office furniture, conference / meeting equipment, LAN cabling, WiFi, PBX telephone systems, professional staff and more. In fact , studies by the UK Chartered Institute of Purchasing (CIPS) show that serviced offices can provide cost savings of up to 78% when compared to conventional leases.
| Traditional Office for 2-3 Persons (S$) | Serviced Office for 2-3 Persons (S$) | |
|---|---|---|
| A) One-Off Start-up Costs | ||
| Agents/Surveyor/Legal Fees | 2,000-3,000 | Inclusive in Rent |
| Fitting Out (Carpets, Partitions) | 5,000 | Inclusive in Rent |
| Air-Con Upgrades | 2,000 | Inclusive in Rent |
| Mechanical & Electrical Works | 5,000 | Inclusive in Rent |
| Furniture & Equipment | 5,000 | Inclusive in Rent |
| CAT 5e/6 Cabling | 1,000 | Inclusive in Rent |
| PBX & Telephone Systems | 3,000 | Inclusive in Rent |
| Connection & Lease Terms - ISPs & Telecom | 1,000 | Inclusive in Rent |
| Staff Recruitment Fees | 2,000 | Inclusive in Rent |
| Removal Fees | 1,000 | Inclusive in Rent |
| Management Time Spent to Oversee Process | Up to 6 months | None - Immediate |
| Total | >S$28,000 | S$0 |
| B) Monthly Recurrent Costs | ||
| Rent (2-3 persons) | 2,000-3,000 | 2,000-5,000 |
| Rates & Service Charges | 200 | Inclusive in Rent |
| Building Insurance Fees | 100 | Inclusive in Rent |
| Property Taxes / Stamp Duties | 200 | Inclusive in Rent |
| Light, Water & Cleaning Costs | 500 | Inclusive in Rent |
| Accountancy & Admin Costs | 200 | Inclusive in Rent |
| Building & Equipment Maintenance Costs | 100 | Inclusive in Rent |
| Furniture & Equipment Depreciation Costs | 200 | Inclusive in Rent |
| Dilapidations Provision | 200 | Inclusive in Rent |
| Security Staff | 500 | Inclusive in Rent |
| Receptionist's Salary | 1,500 | Inclusive in Rent |
| Secretary's Salary | 2,000 | Inclusive in Rent |
| Pantry Expenses | 100 | Inclusive in Rent |
| Total | >S$8,000 per month | S$2,000 to S$5,000 per month |
| C) Miscellaneous Costs | ||
| Lease Commitment | Minimum 2-3 years | 1 month |
| Lease Security Deposit | 6 months | 2 months |
| Break Lease | No break clause allowed | 1-2 months notice |
| Expansion/Downsizing Options | None | Fully Flexible |
| Networking with Companies | None | Many Related Businesses |
| Professional Bilingual Staff | Training Needed | Fully Trained Professionals |
| Upgrade Latest Office Technology | Additional Investment | Inclusive in Rent |
| Money-Back Guarantee | None | Inclusive in Rent |
| Total Start-Upp Cost (1st Month) | >S$36,000 | S$2,000 to S$5,000 per month |
| Monthly Costs | >S$8,000 per month | S$2,000 to S$5,000 per month |
| Occupation Costs (3 Years) | >S$316,000 | S$72,000 to S$180,000 |
| Savings | 0% | 43% to 78% |