Singapore industrial rents, prices rise in Q2 as occupancy edges down: JTC
Overall occupancy rate for the industrial property market stood at 88.8%, falling 0.2 percentage point compared with the previous quarter and the previous year
[SINGAPORE] Rental rates of Singapore industrial properties rose 0.7 per cent quarter-on-quarter (qoq) for Q2, JTC’s latest quarterly market report released on Thursday (Jul 24) indicated.
Compared with Q2 2024, the rental index rose by 2 per cent, representing the smallest year-on-year (yoy) increase since 2021, said JTC.
Catherine He, head of research at Colliers, remarked that the Singapore industrial real estate sector’s resilience in Q2 2025, amid global trade volatility and uncertainty, was partly driven by a temporary boost from front-loading activities during the 90-day pause to US reciprocal tariffs. This prompted companies to accelerate shipments and build up inventories, she said.
Business park rentals logged the highest growth among segments, with qoq growth at 1.2 per cent and yoy growth at 2.3 per cent. Colliers’ He attributed the segment’s performance to leases signed at newly completed projects.
“While leasing activity was limited to renewals, absorption was driven by more space taken up at new completions such as Punggol Digital District and Geneo,” she said.
The multiple-user factory segment logged 0.9 per cent rental growth on the quarter and 2.2 per cent growth on the year. This was driven by newer and better-located projects, He said.
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Both the single-user factory and warehouse segments logged 0.4 per cent rental growth compared with the prior quarter, and 1.1 per cent growth and 1.9 per cent growth, respectively, on the year.
The price index of all industrial space climbed 1.4 per cent from Q1, and 5.5 per cent compared with the previous year’s corresponding period.
Lee Sze Teck, Huttons Asia’s senior director of data analytics, noted that cautious market sentiment capped the qoq price growth. “More companies chose to rent instead of purchasing their own space due to the uncertainties,” Lee added.
Leonard Tay, head of research at Knight Frank, noted that the industrial investment environment has been resilient, with investors “scouring the market for opportunities to acquire logistics and multiple-user industrial assets”.
Multiple-user factory prices rose 1.7 per cent on the quarter, and single-user factory prices climbed 0.4 per cent. On a yoy basis, multiple-user factory prices grew 6.4 per cent and single-user factory prices gained 3.5 per cent.
The overall occupancy rate for the industrial property market stood at 88.8 per cent, falling 0.2 percentage point compared with the previous quarter and year. As at the end of Q2, there were 54 million square metres (sq m) of industrial property space, JTC said.
JTC attributed the slight decline in overall occupancy to substantial new completions, such as World Gateway 2 in the warehouse segment and JTC Space @ Ang Mo Kio in the multiple-user factory segment.
Notwithstanding this marginal decline, overall occupancy for the industrial property market has remained stable at around 89 per cent since 2023, JTC added.
Meanwhile, the occupancy rate for business parks rose 0.8 percentage point on the quarter as tenants moved into newly completed developments.
In Q2 2025, demand for business parks rose by 63,000 sq m compared with Q1, of which 55,000 sq m was in Punggol Digital District, JTC said.
Upcoming supply
About 300,000 sq m of new industrial space could be completed in the second half of 2025, JTC said.
Single-user factory space will account for the largest chunk of this supply at around 48 per cent. Multiple-user factory and warehouse space will respectively constitute 27 per cent and 25 per cent of the supply, JTC added.
In 2026 and 2027, an additional 2.9 million sq m of industrial space is expected to be completed, translating to an average annual supply of around 1.3 million sq m from now until end-2027.
Of this, single-user factory space will account for the largest portion of space, at around 1.7 million sq m. Some 740,000 sq m will comprise warehouse space, while another 478,000 sq m will be multiple-user factory space.
Over the past three years, the average annual supply of industrial space stood at 900,000 sq m, while average demand was 600,000 sq m.
Outlook
Knight Frank’s Tay noted that rental growth across the board for factory, business park and warehouse spaces will likely flatten in H2 2025.
“Global manufacturing outlook is expected to get worse before it gets better, and despite Singapore’s safe-haven status, it will be tumultuous times for industrial real estate to weather,” he added.
Similarly, Colliers’ He foresees rental and price growth moderating in light of slower economic global policy uncertainties and higher industrial supply.
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