To assess how Singapore’s real estate markets will be impacted due to the ongoing virus outbreak, Colliers International’s new research report references market performance during the SARS outbreak in 2003.
That year, Singapore’s economic growth saw a 0.3% y-o-y contraction in Q2, at the height of the SARS outbreak. But the economy rebounded in Q3 and Q4 of 2003 with respective growth rates of 5.3% and 8.9% y-o-y. GDP growth in 2003 was 4.5% but recovered as the uptrend continued in 2004, when Singapore’s GDP grew by 9.9%.
Singapore’s property market was on the decline prior to the SARS outbreak, but office rents were up by 3.5%, retail rents by 3.7% and industrial rents climbed by 1.5% by the end of 2004.
Overall real estate investment sales recovered to $3.2 billion within the second half of 2003, a 29% increase y-o-y.
Looking at trends in 2003, head of Research for Singapore at Colliers International Tricia Song says: “Assuming the Covid-19 outbreak runs its course by June this year, we estimate that certain property sectors, such as investment sales and office leasing, could see rapid recovery in the second half of 2020.”
However, she cautions that with the recent spread of the virus beyond East Asia, there is an increased possibility of a negative scenario in which disruption persists into the second half of 2020.
Colliers Research maintains its forecasts for the various property sectors for now. It recommends various property sectors to accelerate technology adoption, be it expanding offline-to-online strategies for retailers or adopting efficient inventory and last-mile management process for warehouses.
Investors are encouraged to focus on long-term drivers as a rapid recovery in H2 is possible.
Source: Edge Property News