Moving From Coworking To A “Traditional” Office? A Case Study
In our previous case study, we explored how a boutique financial consultancy in Singapore transitioned from a traditional office space to a private office suite in a luxury coworking space. Now, consider a company who did just the opposite. Despite the flexibility and cost-effectiveness that coworking can provide, there’s a good case for long-term office space.
Renting your own long-term office space guarantees both privacy and the opportunity to create a physical brand. Most companies who take their own space have reached relative stability in their growth and don’t expect major fluctuations in their headcount. The emphasis is now on establishing a strong brand presence over the long haul and building up a company culture. Additionally, companies in certain industries, such as FinTech, may be required by the Monetary Authority of Singapore (MAS) to adhere certain regulations, including privacy requirements. Read our article about the factors to consider before finding a long-term, traditional office space.
Dubbed as “traditional” office spaces, a long-term space can take a variety of forms in Singapore: be it a space in a high-quality office building (Grade A or B), a shophouse office space, or a high-tech industrial office, among other options. In this case study, we walk you through the journey of Hummingbird, an MAS-regulated FinTech darling, that moved from a coworking space to a shophouse space. They originally loved their coworking space because of its collaborative atmosphere, open setup, and beautiful design that complemented their brand aesthetic. Nonetheless, they encountered issues when it came to privacy.
Hummingbird’s Workspace Concerns
Hummingbird is a startup that grew very quickly to become a darling of the FinTech industry. They expanded to Singapore to establish their Asia headquarters with a nimble sales team of 15. It made sense for them to choose flexible space to set up quickly, keep costs low and build awareness in the local FinTech community.
Despite the great perks of coworking, the appeal of coworking waned as the Hummingbird team grew and the MAS privacy requirement became a priority. As the popularity of the company increased, they also got distracted and frustrated by other members literally knocking on their door with resumes, cover letters, and business cards in hand!
While the experience was flattering at first, the attention came to disrupt the productivity of Hummingbird’s employees. They struggled to concentrate on their work and rushed into their office every morning to maintain some level of privacy. Soon, employees started avoiding the common areas altogether and lunched out or in their private office. As a consequence, Hummingbird was unable to fully enjoy the benefits of coworking: community and collaboration. Above all, Hummingbird was concerned with keeping their client data secure and confidential. It was time to start searching for new workspace options.
Step 1: Search
Hummingbird submitted their request through GorillaSearch. Among their search criteria, they wanted to be within a 5-minute walk from an MRT station along the East-West line. As the company puts a premium on employee satisfaction, they also wanted to be close to lifestyle amenities like F&B options, yoga studios, and gyms, if possible. Furthermore, to host colleagues visiting from abroad, the company wanted their office to be near a few hotel options.
Hummingbird was looking for something quaint and unusual to give off a creative, relaxed vibe, which they loved in their original coworking space. From their GorillaSearch request, Hummingbird received matches from a variety of spaces: two coworking spaces on the fringe of the CBD, one industrial long-term space, and a few traditional shophouse offices in the Tanjong Pagar and Telok Ayer areas. From this shortlist, Hummingbird could further experience each space with HD photos and 360º walkthroughs. In particular, they were curious about the existing tenant/member profile in each space and building. What was the neighbourhood like? They messaged their questions to the landlords directly using the GorillaSearch messaging feature.
Step 2: Visit
After pre-viewing the spaces on GorillaSpace, Hummingbird shortlisted three traditional offices in shophouses and one coworking space to visit. The company was especially drawn to these spaces because of their creative vibe and central location. Since the long-term shophouse offices were all bare units, the company’s main consideration when visiting included access to natural light and nearby amenities. When it came to the shophouse exterior, Hummingbird wanted an aesthetic that struck the perfect balance between modern and historic.
Hummingbird was particularly impressed by one shophouse office on Duxton Road. The office spanned three floors, including a mezzanine level with plenty of open space for breakout areas. From the outside, the building was embossed with ceramic tiles that added a vintage touch to the space. More importantly, the space was only a five-minute walk away from Tanjong Pagar MRT, and nearby, employees would have access to the renowned Maxwell Food Centre, a variety of F&B options, and a yoga studio right below them!
On the other hand, at the coworking space they visited, they appreciated the industrial, yet professional aesthetic. The available private office was spacious with a great window view of the CBD, and there were many meeting rooms available for hosting clients. Still, Hummingbird worried about the same issues with privacy that they faced in their current coworking space.
Step 3: Evaluate
It became clear to Hummingbird that renting out their own traditional office space was the most attractive choice. These offices gave Hummingbird the opportunity to fully brand and take ownership of their space. In particular, the shophouse office along Duxton Road stood out to them the most. It was colourful and edgy, falling in line with the company’s innovative brand personality. Above all, the company would be the only tenants of the space, giving them the privacy they sorely needed in their original location.
Hummingbird needed to compare costs with their current space to understand if a shophouse lease would be priced competitively over the long term. They currently occupied a premium office in a high-end coworking space at $18,000 per month. Fortunately, there were no additional fitout or reinstatement costs, leaving the total cost of the space for three years at $648,000. For the shophouse option, the company would be charged $9 per square foot per month for a monthly rental of $16,200 per month and a total of $534,600 over the three-year lease inclusive of three months rent-free.
Although the shophouse rental was more attractive than their current coworking rental, as a bare-shell space, the shophouse space would need an estimated $90 per square foot fit-out to achieve a like-for-like premium feel. Overall, the shophouse space would be only slightly more expensive than the current coworking space, but be much better adapted to Hummingbird’s needs.
Given that the shophouse provided the added benefits of privacy and complete control over branding, Hummingbird found that the slight difference in costs was acceptable. Ultimately, cost was secondary to the privacy and employee satisfaction this new space could provide. The choice was made: Hummingbird was decided to go for their own shophouse office.
Through GorillaSearch, Hummingbird found the shophouse office of their choice. They were able to contact the landlord directly to negotiate lease terms. The company was happy with the standard lease term of three years, since they did not expect to leave the area in the near future. As a bonus, a long-term lease arrangement gave the company leverage to negotiate a lower rent!
Step 4: Preparing the Space for Move-In
From the beginning, Hummingbird knew they wanted to keep the open space theme they have in their US headquarters. For this shophouse office, they opted for a mixed layout, with enough open areas to encourage collaboration within the team. The mezzanine floor was planned to function as both a breakout space and a “chill-out” space with bean bags, a pool table, and a stocked pantry, among other amenities. The top floor was reserved for private workstations and meeting rooms.
To facilitate the fit-out process, Hummingbird hired an interior designer – referred by GorillaSpace – who worked with them over two weeks to brainstorm possible layouts, colour schemes, and identify the different “blocks” within the space. The company also enlisted an internet service provider to install a lightning fast and secure Wifi connection across all floors.
The entire fit-out process took about one-and-a-half months to complete. This process involved buying and moving in furniture, varnishing the wooden floors, painting the walls, and installing necessary IT infrastructure. Hummingbird ultimately had a clear vision for their office and were beyond excited to move into a space that belonged to them, and them alone.
Flexible spaces provide plenty of benefits for many small and medium sized companies. Nonetheless, experience shows that companies should also carefully consider whether shared working environments are the most adapted to their type of business. In the case of Hummingbird, the creative atmosphere of their original coworking space could not overcome the problems they encountered where privacy was concerned. As a FinTech company with stable growth prospects, occupying their own office space allowed them to both satisfy privacy regulations and build a strong brand in Asia.
In Singapore, not all traditional offices must be in high-rise buildings. Shophouse offices combine a unique blend of cultural heritage and functionality – perfect for innovative businesses who “paint outside the lines”. The fitout process of a historical building can take longer than for a Grade A building. Having your own office space requires businesses to have a clear vision for how they want to present their brand – both to visitors and for their employees.
At GorillaSpace, we offer a variety of traditional office space options in Singapore, from units in prestigious Grade A buildings to chic shophouses in fashionable districts. Check out 360º walk-throughs and HD photos of workspaces on our platform. If you have more specific requests, just let us know through GorillaSearch and our smart engine will curate the spaces that best match your needs.
We work closely with clients to help them find their right workspace. If, like Hummingbird, you are considering having your very own long-term office, reach out to us at +65 8817 9170 or [email protected].