Phase 1 of the US-China trade deal offered some respite from a protracted trade war which had disrupted trade worldwide, while the global economy had weathered a muted 2019, and seemed ready to embark on a trajectory of cyclical recovery. By all appearances, a silver lining had emerged.
Then COVID-19 struck, and within weeks of the first few cases discovered in China’s Wuhan city in late December last year, the disease had rapidly festered and spread across a tremendous geographical expanse. To date, more than 90,000 people across 50 countries have been infected. The severity of the outbreak and the economic fallout it entails are underscored by the US Federal Reserve’s emergency decision to slash interest rates on 3 March 2020.
As a gateway city that handles huge amounts of traffic, Singapore has likewise been affected by the viral outbreak. Yet – through a detection regime hailed as the “gold standard” by Harvard researchers, and a comprehensive “Unity Budget” to help the country navigate the uncertainties ahead – the socioeconomic fabric has held firm.
What then has been the impact of COVID-19 on Singapore real estate, and what are its implications going forward?
Alice Tan, Senior Director of Research & Consulting, holds the view that the property market here is well-prepared to withstand even a prolonged siege from COVID-19, and is anticipated to remain resilient as businesses and consumers eventually “go back to their routine rhythm of activities, under a normalised regime of personal hygiene, illness prevention, new ways of work and play and supporting the well-being of occupants in public spaces”.
While the retail and industrial sectors may have to brace themselves for headwinds over the short term, the residential and commercial markets are expected to adapt well to the challenges that lie ahead.
As developers step up on precautionary measures and deploy additional marketing channels such as 3D video-walkthroughs of showflats, interactive e-brochures and social media, demand is expected be forthcoming. The vigorous response to Parc Canberra, The M and Ola is a telling case in point.
On the commercial front, corporates have been exploring workspace options for some time as they mull over mid-term plans, and are likely to commit to suitable business space solutions once the outbreak subsides, says Alice.
Additionally, as companies formulate and implement business continuity plans (BCPs), the demand for tech solutions to support BCPs will rise. According to Alice, the “accelerated pace of technology and digitalisation in workstyles would propel the expansion of existing tech firms and creation of start-ups, thereon translating to higher demand for office spaces from tech tenants, both in flexible workspace and core spaces”.
Get a more detailed analysis in our Insight paper “Brave the cold and carry on: Impact of COVID-19 on Singapore Property” here:
|Read the full report here|