Leasing an office comes with many challenges when you begin your journey. Being able to navigate through these obstacles is not only essential, but also a necessity if you want to get good value for your money.
This short guide will provide a brief overview of the process from identifying suitable office spaces to signing a lease agreement. It is our goal to ensure that anyone new to office rental will be able to gain sufficient knowledge in understanding the process with a seven minute read.
Contact A Tenant’s Representative
In many cases, businesses will jump right into searching for available office spaces without consulting a Tenant’s Representative prior to starting their search. Consequently, they spent considerable time researching locations, buildings, and rental rates for their new office space.
A Tenant’s Representative is a real estate agent specializing in helping businesses find the best suited office space based on their specific needs. A Tenant’s Representative provides a full range of services starting from space advisory, recommending the right spaces for inspection, to the delivery of the new office to the tenant.
An office Tenant’s Representative will do the following tasks, though this list is not exhaustive.
- Prepare timeline for office move
- Providing you with the latest office rental market info
- Providing you with a list of recommended office spaces matching your requirements, including off-market listings not available to the general public
- Scheduling and conducting office tours
- Submitting offers and negotiating lease terms
- Keeping you informed about cash outlays
As an added bonus, there is no fee involved in using this professional service to secure your ideal office space, which is one of the biggest advantages.
Receive A List of Recommended Office Spaces
Upon understanding your space requirements, your Tenant’s Representative will compile a list of available spaces that match your requirements and will send it to your inbox for your consideration.
In most cases, businesses will inspect five to eight offices.
Take a Tour of The Offices
Your Tenant’s Representative will organise viewings for your key decision makers. During the site inspections, you’ll find other office criteria you missed earlier, so work with your Tenant’s Representative to refine your search.
The process often takes 2-3 viewing sessions before the best suited office space is identified
Prepare a Letter of Intent (LOI)
Once you identify a space that you are interested in, you should issue a Letter of Intent (LOI), a document that does not have legal weight, which outlines your proposed terms to the landlord. This document will be prepared by your Tenant’s Representative for your review and approval before it is submitted to the landlord.
The process of negotiating a commercial lease differs from negotiating a residential lease; landlords will usually not entertain verbal offers.
The Landlord will conduct due diligence on the prospect and its business activities after receiving the LOI. When the landlord is satisfied with the profile of the tenant, they will begin negotiating.
As soon as the landlord and the tenant have reached an agreement, a Letter of Offer (LOO) and a specimen copy of the Tenancy Agreement will be given to the tenant for their review and consideration.
In most cases, the entire process takes between two and four weeks to complete. The final rent and tenancy terms can take months for some MNCs if the negotiations drag on and for tenants with multiple layers of approval needed.
The Signing of Letter of Offer (LOO)
The Letter of Offer (LOO) expands on the terms set forth in the Tenancy Agreement. Once both parties have agreed on the terms of the lease, the tenant will sign the LOO and make payment for the lease, including the Security Deposit, the first month’s advance rent, stamp duty and the legal fee for
Preparing The Lease Agreement
Following the signing of the Letter of Offer, the landlords will instruct their legal counsel to go through the process of engrossing the lease agreement with the agreed terms for effective execution as soon as possible.
Signing of The Lease Agreement (LA)
The average length of a standard office lease in Singapore is between two and three years. for larger offices rented by established MNCs, the lease term could be between five to 10 years to make more sense for them.
The lease agreement covers a variety of important topics, primarily what tenants should and should not do. It is true that commercial lease agreements in Singapore may appear one-sided to many foreign tenants. However, there are reasons for the landlords to impose such conditions that are often seen as “unreasonable” by most tenants.
At Owee Commercial Real Estate, our team has extensive experience and the knowledge required to assist tenants in finding the best suited office space for their business. Talk to us today if you are seeking to rent an office space in Singapore. The service is free of charge!
Nic is the Executive Director and Key Executive Officer (KEO) of Owee Commercial Real Estate Pte Ltd. Nic starts his real estate career in 1995. He focuses in providing real estate services specifically to international high net-worth individuals and corporate clients. His expertise includes commercial properties finding, property investment planning & acquisition, managing buy to let property and tenant representation for office space.