Nearly 70 per cent of Singapore residents expect the business environment to deteriorate in the second half of the year as a result of COVID-19, a new survey has shown.

CBRE's Asia Pacific Occupier Flash Survey was conducted with 250 occupier clients between 23 March and 5 April 2020 as the region began to record more cases of the virus.

The results indicate 69 per cent of Singapore respondents’ leasing decisions were impacted by the COVID-19 outbreak, including placing expansion plans on hold, as well as site visits.

Source: CBRE

More than 90 per cent of respondents also said they were quick to implement remote/home working after the COVID-19 outbreak.

CBRE Southeast Asia Head of Research Desmond Sim told WILLIAMS MEDIA underlying new office demand remained subdued in light of weaker business sentiment. 

"The introduction of the COVID-19 'circuit breaker' measures further exacerbated business uncertainty," he said.

"Coupled with the concern of backfilling upcoming vacant stock that will emerge from the relocation of tenants, rents are subjected to harsher downward pressures for the rest of 2020."

Of the Singapore respondents in the survey, 76 per cent expect office revenue to contract in 2020, with most of them expecting a contraction between 10 per cent to 30 per cent.

Source: CBRE

Mr Sim said there were still some bright spots in the market, despite the current situation.

"Taking into account a confluence of factors such as GDP, STI movement, net employment and vacancy, Grade A (Core CBD) rents are expected to decline by 13 per cent in 2020 to $10.05 psf/month," he said.

"Depending on the duration of the COVID-19 outbreak, we may see a potential rental recovery of 4.5 per cent in 2021.

"This is supported by a rebound in the economy and limited new supply.

"Capital values are likely to be more resilient due to the limited stock of Grade A offices and the dearth of transactions."

Click here to download a copy of the report.

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