SINGAPORE (June 8): While the office sector has been the least impacted by Covid-19 so far, DBS analysts Rachel Tan and Derek Tan are “cautious” on the potential economic impact it might have on office demand as Singapore gradually reopens its economy.
In a Monday report, both analysts note that there is a historical co-relation between office demand, and GDP across the past three recessions caused by economic crises in Singapore. Hence, they believe that the current economic recession in 2020 will coincide with the bottom in both office demand and office S-REIT share prices.
Forecasting a bottoming in the current Covid-19 recession in 2Q20, both analysts expect office net demand to start declining in 2Q20, in tandem with the GDP.
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