Would you return to the office if the number of local coronavirus cases fell close to zero? Singapore, which has long kept daily cases in the single digits, shows there is no simple answer to that question.
Early terminations of prime office leases in the city-state steadily rose through the end of last year. Global financial services groups, including Citigroup, have cut back on office space. That has marked an abrupt reversal for Singapore. Before it was increasingly the preferred choice of multinational companies over Hong Kong as the region’s financial hub.
Unfortunately for local developers, the trend will persist. Falling rents already weigh on their bottom lines. Last week CapitaLand, the largest, posted a record $1.2 bn loss for 2020, its first in two decades. The company booked $1.9bn in revaluation and impairment charges on its investment properties and residential projects. Operating profit after tax and minority interests fell 27 per cent