Singapore Eases Workplace Restrictions; Office Rents To Bottom in 2022


SINGAPORE – The Singapore government has made its most significant easing of workplace restrictions since the circuit breaker measures were introduced on 7 April, based on an announcement by the multi-ministry task force overseeing the virus response on Wednesday afternoon (23 September).

Starting on Monday (28 September), employees can stay at their office for half of their overall work hours, but not more than 50 percent of a company’s staff can work there at any given time.

For example, the Ministry of Health (MOH) said a full-time employee on a six-day workweek can work in the office for up to three days per week. A company with 10 full-timers can divide their workers into two teams composed of five members each. Both teams can work alternately at home or in the office per week.

However, workers must comply with social distancing of at least 1m, with safe distances demarcated in the office.

Additionally, work-related events can now be held in the office for up to 50 persons, or fewer depending on the capacity of the place. Those now permitted include seminars, conferences, corporate retreats, annual general meetings (AGM), and extraordinary general meetings (EGM). However, big social gatherings in the office like celebrations, parties, and team bonding activities are still not allowed.

Meanwhile, Cushman & Wakefield’s (C&W) recently published “Global Office Impact Report and Recovery Timing” forecasted that office rents will hit rock bottom by the first quarter of 2022, and then rebound from that point to return to pre-COVID-19 peak levels by 2025.

However, office rents are projected to fall 10.9 percent peak-to-trough from the second quarter of 2020 to the first quarter of 2022.

Specifically, office rents in advanced economies across the Asia Pacific are forecasted to fall by 13.1 percent and 4.7 percent year-on-year in 2021 and 2022 respectively, then recover by 4.8 percent by 2023. For emerging economies, office rents are projected to dip 1.7 percent next year and edge up by 1.1 percent and 3.6 percent in 2022 and 2023.

In Europe, office rents are forecasted to drop by 7.8 percent and 1.7 percent on an annual basis in 2021 and 2022 respectively, then rebound by 3.9 percent by 2023. In the US, office rents are projected to fall by 6.5 percent and 2.3 percent over the next two years, then recover by 2.6 percent by 2023.

As for office vacancy worldwide, it’s expected to increase from 10.9 percent before the virus outbreak in Q4 2019 to 15.6 percent by the second quarter of 2022.

According to C&W’s Chief Economist and Global Research Head Kevin Thorpe, they looked at the collective impact of the pandemic, including office vacancy, job losses, rental rates, geographic characteristics, and the prevalence of work from home.

This is to “establish future-looking scenarios that, under our base case, ultimately project a full global office market recovery. Of course, all real estate is intensely local, and not every local market will follow the same path to recovery,” he added.

 


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