Why Rent a Serviced Office?

The number of serviced office providers in Malaysia have been growing steadily of late. We have long-time global providers like ServCorp and Regus, Singapore-based providers like apbcOffices and a handful of local providers like InCube8 and Triden Suite.

For the record, serviced offices are not cheap. A tiny shoebox room that fits two workstations and no windows at the Gardens North Tower in Mid Valley can set you back by RM2,000 a month. In addition, there is currently an oversupply of office space in the Klang Valley – 23% of the 100 million square feet of office space is empty, according to the latest NAPIC report.

So what motivates a person to rent a serviced office?

1) No Huge Upfront Cost
Unlike the traditional office, there is no big upfront cost. With a serviced office, your upfront costs are registration/administration fee plus 2 months rental deposit. Compare this with a traditional office where you have to spend money on renovation, fittings, furniture, equipment, etc.

2) Low On-going and Maintenance Costs
In a traditional office setup, you need to manage the office yourself. That includes having a receptionist, cleaner and someone to take care of IT. And if things breakdown, you have to foot the bill. In a service office, all these are taken care of by the provider – including the utilities.

3) No Long-term Commitments
When you sign the lease for a traditional office, you usually need to commit at least a year. But with a serviced office, you have the flexibility of signing a contract as short as one month – good for short-term projects.

4) Fast and Hassle-free
With a serviced office, there is no need for renovations nor fights with your contractors, etc. You can move in the same day you sign your lease – provided the desired office is vacant. You can configure the room with partitions to your liking and move to a bigger room should your requirement grows.

Despite all the above benefits, it is not all rosy for the serviced office providers. A recent chat with the Operations Manager of a serviced office in Mid Valley revealed that the centre is only 70% occupied. The biggest problem? Competition. Which is why it is no wonder that providers like ServCorp are offering 50% discount for 6 months for their serviced offices in Kuala Lumpur.

In addition, a serviced office is not for everyone… especially if you have a bigger headcount. At roughly RM1,000 per workstation, a company with 20 employees is looking at a monthly rental of RM20,000 a month!

So should you rent a serviced office? You will need to study the pros and cons, and see how it applies to your situation. Also be realistic with your budget and compare all the available options.