As a property agent specialising in office rentals in Singapore’s Central Business District, I frequently meet tenants who realise—six months to a year after moving in—that their current office space is no longer suitable. Perhaps their headcount has shrunk due to restructuring, departments have been reorganised, or hybrid work has made their current layout feel underutilised.
Very often, the first question they ask is:
“Can we take a smaller space or preterminate our lease?”
And the reality is this:
Most office leases in Singapore do not come with a pretermination clause.
Landlords generally avoid including such clauses because commercial office leases are meant to provide stable rental income for the full term. But when businesses genuinely need to downsize or exit early, there are practical solutions.
1. Start by Speaking With Your Landlord
The first step is always to communicate.
Tenants should explain their situation clearly—whether it’s downsizing, financial considerations, or restructuring—and see if the landlord is open to allowing an early exit.
Some landlords may agree to pretermination with conditions such as:
- A compensation fee
- Covering part of the remaining rent
- Payment of reinstatement costs
- A requirement to provide a replacement tenant
This is negotiable, not guaranteed, but honesty and early communication go a long way.
2. The Most Common & Effective Solution: Assignment or Replacement Tenant
The most practical solution—used widely in the Singapore office market—is to find a replacement tenant to take over your existing lease term.
This can be done through:
- Lease assignment (incoming tenant takes over your current lease)
- A fresh new lease (incoming tenant signs a new lease with the landlord)
Once the new tenant takes over, the outgoing tenant can usually:
- Be released fully from the lease,
- Avoid penalties,
- Only pay legal fees or reinstatement/removal of fixtures depending on what was agreed.
This method is efficient, fair, and widely accepted by both landlords and corporate tenants.
Many tenants choose to engage an agent to market their pretermination space.
There are two ways:
- Exclusive appointment – the most effective, as the agent focuses fully on your unit, manages enquiries, and coordinates viewings efficiently.
- Non-exclusive (informing multiple agents) – more exposure, but often less coordinated.
Whichever approach you choose, the key is to work with an agent specialised in office rentals within the same area, especially in the CBD where demand patterns, tenant profiles, building positioning, and rental levels vary significantly from street to street.
With the right strategy and positioning, pretermination spaces can often be filled quickly—sometimes even allowing landlords to achieve better rents in a rising market.
Conclusion
Preterminating an office lease in Singapore is not as impossible as many tenants think. Even though most leases do not allow early termination, practical and landlord-friendly solutions exist.
If you find that your current office space is underutilised and you are considering downsizing, restructuring, or exiting early, speaking with an experienced CBD office specialist can help you assess options, negotiate with landlords, and secure the right replacement tenant smoothly.
If you need assistance or advice on managing a pretermination lease or marketing your office space in the CBD, feel free to reach out—I’m here to help.
