Singapore’s GDP growth is forecast to continue its structural deceleration over the coming five years and to expand an average of 2.5% p.a. for the coming five years: well down from the 4.6% p.a. for the past ten-year period. The Consensus Economics mean forecast is for 2.1% growth this year and 2.3% in 2020 (June 2019 survey). Its unemployment rate of just 3.8% is expected to decrease gradually by 2023 to 3.2%. Base case is for CPI to average 1.6% for the five-year outlook, which is higher than in recent years but slightly lower than the ten-year historic average of 1.7%. Long term government bond yields are forecast to rise over the coming five years from 2.0% at the end of 2018 to 3.4% by 2023.
Data points through end of June 2019. Change represents month-over-month change.
Retail sales growth was positive in 2018, thanks to improving consumer confidence, strong tourist arrivals and a healthy labour market. Rental declines of recent years have eased and the market is stabilizing after a prolonged period of rental correction. As consumers’ preferences become more sophisticated, it is critical for both landlords and retailers to work together and adapt to meet this demand. Prime rents remained stable at SGD 65/sqft/month in Q1 2019 (CBRE) and the supply pipeline is expected to tighten in coming years. Rental growth will likely be driven by prime malls with secondary locations to struggle. In the mid to long term, a strong rental rebound is unlikely as uncertainty remains for retailers given labor shortages and a competitive e-commerce scene.
This information is for our clients and investors only. Please note that the content of this report is for informational purposes only and should not be viewed as investment advice or an offer or solicitation. Any opinions are solely those of the Strategy and Research Team of CBRE Global Investors and are subject to change without notice, and may not be consistent with market trends or future events. This research is based on current public information that we consider reliable, but we do not represent it as accurate, updated or complete, and it should not be relied on as such.
Copyright © 2018, CBRE Global Investors, LLC. All rights reserved.