Singapore Commercial Real Estate Laws: Landlord Guide

Singapore’s commercial real estate market—consisting of office spaces, retail storefronts, and industrial warehouses—operates predominantly on the principle of freedom of contract, heavily influenced by English common law and foundational statutes such as the Conveyancing and Law of Property Act 1886 (effective 1 August 1886). However, recent sweeping legislation has fundamentally altered the landscape for retail landlords.

The Lease Agreements for Retail Premises Act 2023

Historically, commercial landlords in Singapore held significant bargaining power over tenants. To level the playing field, the Singapore government passed the Lease Agreements for Retail Premises Act 2023, which strictly mandates compliance with the Code of Conduct for Leasing of Retail Premises in Singapore (CoC).

Effective from February 2024, this legislation applies to all "Qualifying Retail Premises" (QRPs) where the lease term is at least one year.

Qualifying Retail Premises (QRP)

A premises is considered a QRP if:

• The premises are used primarily for the sale of goods or provision of services (such as an F&B outlet, a clothing store, a clinic, or a tuition center).
• The lease is for a period of one year or longer.

If your property is a QRP, your Tenancy Agreement must strictly adhere to the guidelines set out in the CoC. If it does not, the non-compliant clauses can be declared void, and the landlord may face penalties.

Key Commercial Leasing Rules (General & QRP)

| Landlord bears costs for standard lease preparation; Tenant pays only for requested amendments (legal or admin, not both) |

Security Deposits

In typical commercial (office/industrial) leases, the security deposit is usually equivalent to three months’ gross rent.

For Qualifying Retail Premises, the CoC caps the security deposit at a maximum of three months' gross rent for lease terms of up to three years (if the premises is smaller than 5,000 sq ft). Furthermore, the CoC mandates that landlords must accept up to 50% of the security deposit in the form of a bank guarantee if the tenant chooses.

For more detail, see our Commercial Security DepositsPreview unavailable guide.

Eviction Procedures

Commercial evictions in Singapore are governed by the strict terms of the lease and common law principles regarding forfeiture and re-entry. If a commercial tenant misses a rent payment or substantially breaches the lease, the landlord must issue a statutory notice under Section 18 of the Conveyancing and Law of Property Act (CLPA).

Unlike the residential sector, courts generally uphold swift right-of-re-entry clauses in commercial contracts, though tenants can still apply for relief against forfeiture.

For more detail, see our Commercial Eviction ProcessPreview unavailable guide.

Rent Reviews and Increases

There is no general statutory rent control for commercial or industrial properties. Rents are entirely determined by market forces.

A common feature in Singapore commercial leases is the "Base Rent + GTO (Gross Turnover)" model, where a landlord takes a base amount plus a percentage of the tenant's exact monthly sales. Under the CoC, rental formulas must be based on a single computation. 'Either/or' (whichever is higher) formulas are prohibited unless both parties mutually agree and file a joint declaration with the FTIC within 14 days of signing the lease.

For more detail, see our Commercial Rent IncreasesPreview unavailable guide.

Getting Started with Commercial Leasing

Drafting an air-tight commercial lease in Singapore now requires granular knowledge of the Lease Agreements for Retail Premises Act 2023 to avoid inadvertently weaving non-compliant, voidable clauses into a multi-year multi-million-dollar retail contract.

Explore more Singapore commercial compliance topics:

• Commercial Security DepositsPreview unavailable
• Commercial Eviction ProcessPreview unavailable
• Commercial Required DisclosuresPreview unavailable
• Commercial Rent IncreasesPreview unavailable
• Commercial Lease RequirementsPreview unavailable
• Commercial Maintenance ObligationsPreview unavailable
• Commercial Late FeesPreview unavailable