In our previous post, we highlighted some of the factors to look out for when choosing to start or expand your business in Singapore. Amongst the factors, location is the most salient. Thus, it is imperative that you choose the right location because:

  1. It determines the traffic flow of your business
  2. Afterthoughts about the current location will lead to:
    a. Difficulty in changing locations as deposits are already invested in the location
    b. Required to pay for monthly rental cost as per contract – Contributes to a rather huge portion of the businesses’ cost structure and thus affecting overall profitability.
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This short read will give you a bird’s eye view of some of the popular rental spaces in Singapore and how much you should expect if you wish to rent a space there.


Guide to Singapore’s Districts

You might know the 5 regions in Singapore: Central, East, North, North-East and West region (Singapore’s MRT line’s color). But did you know that there are 28 separate districts in Singapore? Each district is grouped together based on the grouping of the different locations. For example, Districts 17 and 18 are places located far east and Districts 25 to 28 are places located far north. Each district commands different pricing for its rental, thus we will need to understand its unique characteristics (e.g. Traffic flow and etc.) and select the one that is favorable to us.

p.s. Good to know the terms when looking out for rental locations

Singapore Districts By Color Code
Singapore divided into 28 districts. Depicted by color code.

Top 5 Affordable Rental Spaces

In our opinion, the top 5 affordable rental spaces in Singapore are Districts 3, 7, 10,18 and 19.  These districts are selected based on the following criteria: High Traffic Flow, Positive Audience Profiling and most importantly, cost-effective pricing.

Singapore Property Play
Estimated Price Points in each district.

1. High Traffic Flow and Positive Audience Profiling

The aforementioned districts have a common characteristic of having a high density of the younger population. With the location strategically located to achieve the above, it is a win-win situation to benefit from, from renting the location.

2. Cost-Effective Pricing

With the two criteria: high traffic flow and accurate audience profiling satisfied, the price that is demanded from renting the space is justifiable and thus cost-effective.

Though the figures above might look favorable to some. It is always important to consider the financial situation of your business before making any long term decisions. So the question is, how much should you spend on rental cost?

3. Rule Of Thumb

A general rule of thumb for businesses to ensure profitability is for the business to keep its rental cost well within 10% of its current operations. Having discussed the average prices of the possible rental spaces in Singapore above, it is imperative that Business Owners have a deep understanding of its cost structure and how rental cost could be properly managed.

4. Knowing Your Finances

Opportunities present itself when least expected. It can be a real bummer when you have found your dream location at the right price, but your pockets are empty. What should you do? Think out of the box! There are other sources of financing that could help you at desperate times like this. For example, short term loans from banks, alternative financing and etc. Here’s a read to get you started on the know-how for SME owners before loaning.

Conclusion

All in all, it really depends on the kind of business you are setting up. If you are a Food and Beverage company and the youth traffic is important for you. Most likely the above example will fit in well for you. But if you are a company that specializes in more niche activities where the crowd will come to you instead of vice versa. The location is not that important. What matters most is the value that you can offer to your customers.

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