Office rents in the central region dipped in the first three months of the year, the first quarter-on-quarter decline since the April-June period in 2017.
Rents slipped 0.6 per cent from the last three months of last year, Urban Redevelopment Authority (URA) data showed yesterday.
This was in contrast with the 0.5 per cent rise from the third to fourth quarters last year.
The price index rose 3 per cent for the first quarter, a faster pace of gain compared with the 2.4 per cent increase with the previous quarter.
Ms Christine Li, head of research for Singapore and South-east Asia at Cushman & Wakefield, said this is not surprising as investor interest in commercial assets has grown.
"The divergent performance of the office price and rental indices could be a sign that tenants are showing some resistance to higher rents, in view of the uncertainties in business outlook," she added.
A fall in the amount of available office space helped send the islandwide vacancy rate from 12.1 per cent at Dec 31 to 11.8 per cent at March 31.
Ms Tay Huey Ying, JLL's head of research and consultancy for Singapore, said the supply squeeze will continue to give landlords the upper hand in lease negotiations.
That suggests that this year could outperform 2018 in terms of rent growth in this zone, she added.
Cushman's Ms Li said the slowdown in the economy has been felt most keenly in manufacturing, "nevertheless, office rental growth in 2019 can be sustained due to the limited supply and healthy pre-leasing activities in the market".
There was about 733,000 sq m in gross floor area of office space in the pipeline as at March 31 against 732,000 sq m as at Dec 31.
Retail rents in the central region fell 0.2 per cent in the first quarter, after rising 1.2 per cent in the previous quarter.
Ms Tay said the dip was likely due to changing tenant profiles, such as the increasing take-up of prime-level space by rent-sensitive occupiers requiring large spaces.
The URA price index of retail space in the central region slumped 1.9 per cent in the quarter against an increase of 1.5 per cent in the last three months of last year.
The amount of occupied retail space fell by 14,000 sq m in the first quarter compared with a rise of 24,000 sq m in the previous quarter.
Ms Li said: "Retailers are still cautious about taking up spaces."
The islandwide retail vacancy rate grew to 8.7 per cent at the end of the first quarter this year, from 8.5 per cent at the end of last year.
There was about 364,000 sq m of retail space in the pipeline as at March 31, down from 387,000 sq m as at Dec 31.
Ms Tay said: "On a more upbeat note, the Orchard Road revamp and the $9 billion expansion plans by Marina Bay Sands and Resorts World Sentosa should inject confidence in the tourism and retail industries.
"Nonetheless, the restructuring in the retail space will likely see the URA retail rental index flip-flopping between marginal upticks and downticks in the short term."