Overall GDP also contracted at -2.2% whilst service industries declined at -3.1%.
Grade A CBD rents fell 0.5% to $10.61 per sqft (psf) per month in Q1 2020 over the last quarter of 2019, according to Cushman & Wakefield’s report. Occupiers are expected to further delay their decision-making in new leases until Q2 due to the circuit-breaker measures by the government.
Overall GDP growth also contracted at 2.2% in Q1 2020, according to the Ministry of Trade & Industry, with growth in the services producing industries declining at 3.1%.
According to the report, a double impact of a global and local recession due to the COVID-19 epidemic is likely to occur, resulting in Grade A CBD rents moderating by around 10% in 2020 with a further decline in 2021.
Singapore may also enter a technical recession if the GDP contraction in Q2 remains pronounced.
In addition, growth in office-using employment will also continue to decrease in subsequent quarters. Rents in Marina Bay and Raffles Place have also started to decline, dropping 1% QoQ, whilst the other submarkets remain stable for now.
Nevertheless, with COVID-19 cases easing in China, activity levels may resume over the remaining quarters of 2020.
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