The overall outlook is cautious given the uncertain global economy and last week's tough new property cooling measures, said the report by Colliers International.
It said investors may look to office space given the "compelling low interest rate environment" and high policy risks in the residential sector.
The sound financial structure, business-friendly policies and Singapore's status as a financial hub are also likely to spur investor demand for office space here, it added.
Colliers director of research and advisory Chia Siew Chuin said rents of Grade A office space in the Central Business District are likely to slide by 5 per cent to 10 per cent this year, as the euro zone crisis and "fiscal cliff" issue in the United States dampen tenant demand.
On the industrial front, Colliers expects the market to take a step back to assess the impact of the new seller's stamp duty imposed by the Government on industrial properties sold within three years of purchase.
The duty, ranging from 5per cent to 15 per cent, was introduced last week to rein in industrial property prices and discourage short-term speculation.
But non-speculative buyers are unlikely to be deterred as they have a longer investment horizon and will keep supporting strata industrial property sales, Ms Chia said.
She also said sales in the retail space market are expected to be uncertain, as a tighter labour force and weaker discretionary spending by locals amid the bearish economic outlook would put a lid on retailers' expansion - softening demand for retail space.
Rents of prime retail space in the shopping district of Orchard Road are also expected to decline by 3 per cent to 5 per cent this year, as 340,000 sq ft is set to be added to the supply of retail space there.
The report added that investment activity would be led by the sale of government land sites, as 54 land parcels were earmarked for the first half of the year under the Government Land Sales programme.
"Underpinned by the anticipation of an active state land market in 2013, the public sector's contribution to the total investment sales value is likely to be substantial," it said.
Source: Straits Times, 17 Jan 2013