Step 1 of Business Agililty: Lease a Business Space
Flexibility has become a strategic commodity in today’s competitive business world riddled with uncertainties. Many successful multinationals, local companies and start-ups alike have opted to lease rather than own properties as a strategy to unlock locational advantages and capital for growth.
One of the first things that is top-of-the-mind for a new company or start-up—and that many ongoing businesses have taken for granted—is the physical workspace. Whether you call it the business location, address or workplace, this is the place where your team collaborates and where you grow your business footprints into the world.
While most start-ups and newly incorporated companies will automatically consider leasing as the more affordable option to buying a business space, mature companies that have amassed sufficient wealth over time would often be drawn to the idea of owning the business address as a milestone of their coming of age as an enterprise.
It’s a big decision and largely boils down to a few key situational factors, including your financial priority (what are the opportunity costs of locking the capital in a property versus leasing the asset?), operational needs (is a permanent space required and is it scalable for future growth?) and branding (will owning the address be a boon or a liability in today’s climate?). Here are some common considerations to help you better understand what you’re getting into with each option.
Buy If you want to have … |
Lease If you are looking for... |
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| Long-term investment & equity build-up | Asset-light options and to free up working capital for business operations & growth opportunities |
Fixed mortgage costs, and avoid variable costs
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Fixed monthly rental costs, and avoid hefty down payments, insurance, maintenance and property improvement costs |
Some income from the rental of business space |
Choice of custom-built or fitted-out space, all with shared facilities |
Property owner status |
Choice of prime locations for a more sophisticated branding or be located near key business hubs |
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Peace of mind and be freed to focus on critical business operations while leaving the property maintenance to a professional team |
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Flexibility in scaling space for growth & operational needs E.g. Overseas expansion under the same developer portfolio E.g. Hybrid working models such as core-flex arrangements |
Then came COVID-19, which totally changed the way the business world worked. As telecommuting becomes a norm at the workplace, flexible and on-demand lease spaces are fast-growing in popularity with businesses desperately trying to adjust to intermittent disruptions while trimming underutilised space. This mega-trend for business agility favours leasing over buying across industries. If you are considering whether to buy or lease a business property, it’s timely to recalibrate and rethink your space strategy.
Boost Your Leasing Strategy! Partner a Landlord That Add Values
Staying ahead of this trend, CapitaLand has been supporting companies in creating and transforming their space needs as the business environment evolve. We are pleased to count industry captains such as DBS Bank, Johnson & Johnson, Dyson, Grab and OSIM among our long-time tenants.
As a CapitaLand tenant, you will get to enjoy a wide range of value-adds beyond the usual considerations for leasing business space. Here’s how you can have a headstart in the leasing game with CapitaLand’s spectrum of added advantages:
1. Extensive Portfolio – Matching your space and growth needs
Armed with an expansive portfolio of 121 workspace developments, CapitaLand has all the works – from single-tenant niches to hub & spoke and core-flex solutions, to satisfy every industrial, logistics, business park and commercial space need. Tenants can occupy the space on long-term leases without having to lock their funds in permanent real estate.
For companies looking at setting up a core headquarter office supplemented by satellite sites to fully leverage the locational advantages, there is the hub & spoke solution. Partnering a single developer with extensive real estate footprints all over the island will give you a leg up when choosing complementary business districts to match your space strategy.
Alternatively, if you are looking to house all your operations under one roof for enhanced productivity and workflows, leasing an entire development ready for move-in can be a quick and fuss-free solution. Across the portfolio, there are plenty of excellent options including entire properties with open, large and column-free contiguous floor plates for space planning flexibility, as well as buildings pre-fitted with ceiling boards, lighting and aircon to help our single tenants save set-up time and costs.
Another space strategy to explore is a core-flex working model, which lets you secure a fixed long-term lease for your core business while giving you ready access to additional space when you need to quickly scale your operations. That’s how CapitaLand supported Shopee’s phenomenal growth as its space partner when its eCommerce business expanded from Murray Street to its core-flex spaces in Ascent and Bridge+, before settling into their very own headquarters at 5 Science Park Drive (now renamed the Shopee Building).
Thinking of expanding overseas? Not a problem at all if you are a CapitaLand tenant! With an international portfolio spanning popular business destinations, such as China, India, Vietnam, Australia, Europe and the USA, the strong overseas presence allows CapitaLand to go beyond the traditional role of a landlord to support tenants’ space solutions needs for their overseas expansion.
2. Bespoke Capabilities – Designing spaces unique to your business needs
One of the key benefits CapitaLand tenants enjoy is the freedom to customise their buildings (via convert-to-suit or build-to-suit) according to their operational and branding needs, while enjoying the financial flexibility of leasing the space.
Take for example its long-time tenant and French multinational Schneider Electric. The Fortune Global 500 company has continued to lease from CapitaLand when it decided to consolidate its team in Singapore at 50 Kallang Avenue. Now renamed as the Schneider Electric Building, the space was converted to suit Schneider Electric’s unique requirements, which included a solar power source, a Live Building Management System Room, a Live Data Centre, a Control Command Centre, a 120-seater auditorium, and to top it off, a stunning roof-top garden. It is now the proud home of Schneider Electric’s East Asia and Japan headquarters and its first Innovation Hub in the region.
3. Enriching Experiences – Forging partnerships and friendships within the CapitaLand ecosystem
CapitaLand is constantly engaging in partnerships with industries and governments. Through these powerful alliances, like the Smart Urban Co-Innovation Lab, we are able to offer tenants valuable opportunities to participate in key projects.
Located at The Galen at Singapore Science Park, the Smart Urban Co-Innovation Lab is Southeast Asia’s first industry-led lab for smart cities solutions development that was initiated by CapitaLand and supported by the Singapore government. It brings together leaders in the smart cities space, such as Amazon Web Services, Cisco Systems, Johnson Controls, Microsoft, Schneider Electric and TPG Telecom, and local firms to pioneer smart city innovations in a live environment powered by 5G connectivity and latest technologies within the Park.
Amongst tenants, CapitaLand also creates opportunities for cross-networking and collaborations, tailored to business and social interests. The Singapore Science Park for instance, often holds business get-togethers, industry conventions and vibrant social activities for the Park community, bridging the gap among professionals beyond the four walls of the workplace.
4. Professional Property Maintenance – Serving quality facilities management and smart technology support
With a single trusted landlord in CapitaLand, the safety, security, facilities management, maintenance, repair and upgrade of properties come standard for tenants. Every CapitaLand property is fully supported by a dedicated team of professional property managers, security team as well as hygiene specialists pandering to your everyday workplace needs.
CapitaLand workspaces are also constantly rejuvenated. From time to time, regular asset enhancements are conducted to offer tenants refreshed facades, new amenities and even extended floor space for improved corporate and employee branding.
Many properties are digitally enabled and frequently updated with new technologies like facial recognition, smart lifts and QR code booking systems too. To improve tenant productivity, CapitaLand has also launched CapitaStar@Work, a mobile app that automagically connects tenants to shared facilities and community events, as well as to earn rewards.
Business agility begins with the right space strategy. Whether you are a seasoned or up-and-coming business owner or manager, you can achieve greater operational nimbleness by leasing flexible spaces that complement your operational needs; and by partnering a trusted developer that will offer you that winning edge, and be there by your side as your business evolves.