SINGAPORE (Nikkei Markets) -- Singapore's malls are starting to see more visitors as fears regarding the COVID-19 coronavirus recede among locals but hotels will continue to be hurt by low occupancy given the plunge in travel across Asia, the city-state's two biggest developers said.
CapitaLand, Southeast Asia's largest property company by assets, also said 12 of its malls in China remain shut but activity at the other 39 is picking up as Beijing gradually allows offices and factories to reopen.
Meanwhile, rival City Developments plans to use the current slowdown to refurbish its giant Jungceylon mall in Phuket, Thailand as well as another mall along Singapore's prime Orchard Road shopping belt.
CapitaLand and CDL both reported strong quarterly earnings earlier in the day but said they expect conditions to be challenging in coming months.
Retailers and hotel owners are expected to be worst hit as companies call off group events and people cancel holiday plans.
A new survey of members by the American Chamber of Commerce in Singapore showed that 40% of companies had canceled travel plans to the city-state while 63% of respondents said they had postponed or canceled large-scale meetings.
At CapitaLand's briefing, group CEO Lee Chee Koon said visitors to its suburban malls in Singapore are now around 5% below normal levels, after a plunge in early February when the government warned of local transmission of the COVID-19 virus.
While the government's risk assessment alert level is still at orange, indicating the severity of the outbreak, Singapore is seeing fewer new cases.
"Things are not back to where we were, but foot traffic has almost gone back to normal at our suburban malls," Lee said.
Suburban malls in Singapore generally cater to locals, unlike those in the Orchard Road and Marina Bay precincts that rely heavily on visitors from abroad.
CapitaLand, whose biggest shareholder is state investor Temasek Holdings, also said it will cut the pay of board members and senior management as well as freeze the salaries of managerial level staff as a sign of solidarity with retail tenants, which have seen a sharp drop in business. CapitaLand Mall Trust, which is managed by CapitaLand, is Singapore's largest retail landlord.
CapitaLand added that its lodgings business, which comprises mostly serviced residences, has been less badly affected than the hotel industry as a whole because of the longer stays and higher reliance on corporate travel.
CDL also said that crowds have returned to its Singapore malls and that popular restaurants are beginning to attract long queues as before.
The outlook for hospitality remained bleak, however, with occupancy levels of 40% to 50% at many of its properties in Asia. Last year, CDL saw average occupancy of 86.2% at its Singapore hotels and 70.5% in the rest of the region.
Kwek Leng Beng, CDL's executive chairman, said conditions would likely go from bad to worse before improving, perhaps in four to five months from now.
CDL currently owns or manages 156 hotels around the world, including Europe and North America.
Singapore has been hard hit by the plunge in tourism and air travel following the outbreak of the coronavirus in China, which has since spread to over 30 countries. Last week, the government cut its growth outlook for the year to between minus 0.5% and 1.5%, indicating the possibility of a full-year recession.
Numerous measures to help companies have since been announced in the February budget, including wage support, tax rebates and working capital loans.
CapitaLand and other retail landlords have also stepped in to help tenants by offering rental rebates and marketing support. Earlier this month, the company said tenants can use their security deposits to offset rental payments for the month of March.
The company reported a near doubling in fourth quarter net profit to 926.6 million Singapore dollars ($662.4 million), helped by contributions from smaller property owner Ascendas-Singbridge, which it acquired last year.
Over at CDL, profit for the quarter rose 13% from a year ago to S$87.7 million on the back of higher earnings from residential development and lower impairment losses from hotels.