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After witnessing tentative signs of recovery in Q4 2019, Singapore’s retail property sector’s hope for a recovery has been dashed by the Covid-19 pandemic, revealed Edmund Tie.
In fact, the pandemic saw transactions across all real estate sectors drop even as the government rolled out a slew of support measures under its Unity Budget, Resilience and Solidarity Packages.
“Retail sales were significantly hit as people avoided going to malls and visitor arrivals plummeted due to travel restrictions,” it said in its latest report.
Retail sales turnover at establishments in Chinatown, which is a prominent tourist destination, plunged by as much as 80% in February, while sales at Jewel Changi Airport fell by as much as 70% over the same month.
“A silver lining in this otherwise gloomy scenario is that the demand for online shopping has surged, as people turned to e-commerce in lieu of physical stores,” said the report.
Online retail sales accounted for 7.4% of total retail transactions in February, up from 5.5% in January.
“The pandemic will fast-track the adoption of technology, from omnichannel retailing to greater use of data analytics to better understand consumers and their preferences,” said Ong Choon Fah, chief executive officer of Edmund Tie.
Over at the office sector, demand remained subdued in Q1 2019 as firms take on a wait-and-see stance while reviewing their operations, strategies and expansion plans.
While occupancy rates at office developments increased 0.4 percentage points quarter-on-quarter to 98.4%, Edmund Tie explained that the hike was due to leases concluded in earlier periods that materialised into physical occupancies during the period under review.
“However, pending a successful containment of the viral outbreak and lifting of the “circuit breaker” measures, downward pressure on occupancy rates, rents and net absorption is expected to keep this sector subdued for the time being,” it said.
“With many businesses having to close temporarily due to the government’s “circuit breaker” measures, commerce has slowed and sentiment turned cautious, and the full impact of these disruptions on the office sector may only be felt in the next few quarters,” added Edmund Tie.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg