There are three scenarios.
First is that there is a straight fight between WP and PAP. This is the most likely scenario where the PAP loses a seat. Even now, when there are many opposition parties lining up to take a pop at PE, this could still be likely, because the strategy of the opposition parties would be to work the ground now, and then later, if they give up Punggol East, they can extract a concession from the WP in return.
Second is that there is a multi-party fight. Under this scenario, it is most likely that the PAP will win. But it would be a rare opportunity for everybody to see which opposition party is the strongest, and this will form the backdrop of whatever horse trading goes on before 2016.
Third is the remote possibility that there is a 2 party fight and one of those parties is not WP. This would mean that the WP thinks that it is feasible to allow a third party to gain a seat in parliament, maybe V Wijeysingha. It could be bad for the WP because it means that WP is not the only opposition party in the spotlight, but the upside is that the PAP can get shot at from 2 sides, which may not be bad for the WP.