The outlook for Singapore's commercial property, including retail, office and industrial space, may have turned grim, according to forecasts from real-estate services provider Colliers.
Singapore's retail landlords and tenants face "challenging times," Colliers said in a note dated Monday, forecasting demand for retail space to lag behind supply this year, with a rise in new space pushing up island-wide vacancy rates.
Colliers said leasing activity slowed and rental declines accelerated in the third quarter amid poor retail sales and online competition.
Singapore's retail sales fell 1 percent in August on year overall and excluding the 30 percent jump in car sales, fell 6.5 percent, with drops in categories including jewellery, restaurants and recreational goods, according to official data.
"In the near term, the uncertain economic outlook and heightened unemployment risk will probably be dampening factors on consumer spending," Colliers said, although it expected the year-end holiday shopping season would mitigate the hit to retail sales.
It forecast ground-level shopping-mall rents in 2016 would fall by 2.0-2.5 percent in regional centers and by 2.5-3.0 percent in the prime Orchard Road shopping belt.
Singapore's office segment may not fare much better.
"Overall office rentals across Singapore continue to slide under pressure of oversupply and lacklustre demand as the market saw the fifth consecutive quarter-on-quarter rental decline in the third quarter," Colliers said.
"Underpinned by gloomier economic outlook from potential U.S. rate hikes, an uncertain Chinese economy and concerns on the repercussions of Brexit, business sentiments and overall office space expansion remain restrained," it added.