The announcement by Singapore Business Federation (SBF) last week to produce a rental code of practice is a push in the right direction, says SingaporeCompanyIncorporation.sg, a leading Singapore business incorporation portal.
It will enhance the transparency of rental rates and allow landlords and entrepreneurs to work together, thereby encouraging more businesses to set up in Singapore.
“Rising rental costs continues to affect businesses in Singapore. Therefore, after the rental code of practice is produced by the SBF, it will be easier for entrepreneurs to predict their costs with forward business planning, and start a company in Singapore”, said Ms. Cheryl Lee, Operations Manager at SingaporeCompanyIncorporation.sg.
The rental code of practice is also expected to minimise any dramatic spikes in the rents by landlords, which can adversely increase the overhead cost for businesses. Playing the role of a national information repository, it is anticipated to provide data on the rental rates in accordance to various areas of Singapore, and discourage landlords from overcharging rents.
Such speculations on the escalations of the office rents may have postured Singapore’s commercial space as prohibitively expensive in the eyes of many businesses, but a different opinion exists in the international arena. The Cushman & Wakefield Global Office Space Across the World publication for 2014 had reported that Singapore’s plush supply of first-rate office space in the Central Business District (CBD) is ranked as the most affordable when compared to the world’s four other top financial centres such as London, New York, Tokyo and Hong Kong. This has made the city-state attractive in the eyes of companies who wish to set up in Singapore.
EMERGING COMMERCIAL HUBS
Apart from the CBD area, the Singapore Government has also ensured that there is an adequate supply of office space to cater to the needs of the companies who wish to set up in Singapore. Outside the city centre of CBD and Marina Bay, commercial hubs are also being actively developed in locations such as Jurong East, Woodlands and Tampines. The country aims to utilise such decentralisation of commercial activities to alleviate traffic congestion and facilitate the efficiency of the infrastructure in the city centre.
This move has garnered positive reception from many multinational corporations that have consolidated operations in these newly developed commercial hubs, such as Credit Suisse at One@Changi City, Deutsche Bank and Unilever at Mapletree Business City. The comparably affordable occupancy costs and newly emerging MRT lines in these locations are cited as the main pull factors for these companies to set up in these sites.
HIGH DEMAND FOR RETAIL BUSINESSES
About 3,000 local and international businesses have been set up in Jurong Gateway, the newly unveiled commercial hub that has a large consumer market potential that is attributed to the one million residents who live in the heartlands of Jurong East and Bukit Batok. Such is the attractiveness of these commercial hubs built in the suburbs of Singapore to businesses. Alongside the affordability of the office space, the presence of such market potential in these freshly constructed commercial hubs makes starting a business in these locations highly viable.
“In view of the active intervention by the SBF to combat the indiscriminate inflation of office rents, and the blossoming of commercial hubs in the periphery of Singapore, we are confident that the republic will remain as an enticing place to start a business”, affirmed Ms. Lee.