The slowdown will be more pronounced in office leases, said S&P Global Ratings credit analyst Hwee Yee Ong in a recent report.
Ong said Macroeconomic softening could temper business confidence this year which, in turn, will weigh on office demand.
"Firms may cut their real estate footprint or hold off on leasing decisions, particularly as hybrid work practices remain common," the S&P Global analyst said.
The expert added that the waning leasing demand from the technology sector will particularly weigh on the office sector.
"Technology firms globally are entering a phase of heavy retrenchments. Singapore has not been spared. Over 1,000 employees in the Singapore technology sector were made redundant from July to mid-November 2022, according to the Minister for Manpower, Tan See Leng. This is almost five times the number of retrenchments during the first half of 2022," she said.
"Technology firms have been one of the key drivers of leasing demand in recent years. As the entities give up or sublet offices, shadow space - floor area that is leased but not utilised - could increase," the S&P Global analyst added.
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