Impact of COVID-19 on the Singapore Office Market

The extent to which COVID-19 will affect the office leasing market is unknown at this stage, but it certainly will not help an already slow market. Businesses planning regional growth normally approach this as a medium/long term project, but there may be a knee jerk reaction to delay expansion or plans to upgrade until the full economic impact is known. With SARS, back in 2003 the market softened for only a short period of around 9-12 months, but this virus is far more widespread than SARS and we expect a greater and longer term negative impact - but it will eventually pass.

The long-term impact of COVID-19 could be another matter. Why? Because more companies are revisiting the concept of working remotely from home and more businesses are looking into co-working facilities. Yet with the latter option, staff will be mingling with a far greater number of people, thus not likely to be reducing the very risk they are seeking to avoid. What could happen is this outbreak could act as an accelerator of disruption, where remote working becomes more accepted, leading to a hybrid solution to the workplace. This could result in companies needing slightly less traditional office space after factoring in some staff will at times be working from home. It is still early days, but this is one possible direction for office demand.