Rise in Singapore industrial rents tapers to 2.4% for 2025 after almost flat Q4: JTC

[SINGAPORE] Rents of Singapore’s industrial spaces rose 2.4 per cent in 2025, slowing from a 3.5 per cent gain in 2024 and an 8.9 per cent surge in 2023.

The rise in JTC’s rental index for all industrial space marked its smallest annual increase since 2021, based on data released on Thursday (Jan 22). 

On a quarterly basis, industrial rents edged up 0.5 per cent in the fourth quarter. While momentum is slowing, the Q4 data nevertheless showed 21 straight quarters of increases from Q4 2020.

Tricia Song, CBRE head of research for Singapore and South-east Asia, said: “Singapore’s industrial market has demonstrated resilience over the last year. Although the tariffs announced by the US in April caused some jitters in global markets, occupiers are looking beyond the short-term market volatility and planning for the future.”

Economic uncertainties have also resulted in new-to-market tenants and businesses expanding their footprint in Singapore, she added. 

Across the various market segments, only the business park segment recorded a rental acceleration in 2025, compared with 2024 on a full year basis, indicating resilient demand, Song noted. 

She said: “Newer facilities in city fringe locations continue to be highly sought after, which helped to lift average rental rates. However, some older assets in rest of island locations are facing challenges due to ageing specifications and flight-to-quality trends.” 

Buying interest in industrial assets remained active with several high-value transactions during the quarter, said Leonard Tay, Knight Frank Singapore’s head of research. 

These included the sale of a freehold warehouse at 680 Upper Thomson Road for S$351 million, as well as the divestment of eight industrial properties by ESR Real Estate Investment Trust for S$338.1 million. 

SEE ALSO

Singapore industrial market set for ‘uneven growth’ in 2026

In Q4, the price index of all industrial space gained 1.4 per cent from Q3. All industrial prices were up 5 per cent from the year-ago period. 

CBRE’s Song said: “With the steep decline in Singapore’s short to medium-term interest rates compared to US benchmark rates in 2025, the financing environment has been supportive for investors, leading to buoyant transactional activity for the industrial sector...

“Leasehold industrial assets continue to appeal to income-seeking investors given the positive carry, and this trend is expected to persist for the year ahead.”

Knight Frank’s Tay pointed to clear signs of improvement in the outlook for manufacturing during the second half of the year. 

“Against this backdrop, there was a notable increase in sales of leasehold factories with remaining tenures of less than 30 years compared with a year ago, pointing towards a broader shift in investor appetite for shorter-tenure industrial assets.”

Overall occupancy

Overall occupancy stood at 88.7 per cent, down 0.4 percentage point from 89.1 per cent in the previous quarter and 0.3 percentage point lower than the 89 per cent recorded a year earlier. 

The decline was driven by strong completions, leading to an increase in total industrial stock by 345,000 square metres, JTC said. 

The warehouse and business park segments logged marginally higher occupancies compared with the previous quarter. In Q4, warehouses had an occupancy of 89.8 per cent, from 89.6 per cent, while business parks had an occupancy of 77.1 per cent, from 77 per cent in Q3. 

Occupancy for the multiple-user and single-user factory segments declined slightly in Q4.

The occupancy rate for the multiple-user factory segment stood at 89.9 per cent in Q4, down from 91 per cent in Q3. The single-user factory segment recorded an occupancy of 88.8 per cent, declining from 89.1 per cent previously. 

Total available stock in Q4 rose to 54.3 million sq m, from 53.9 million sq m available in the previous quarter. 

Transaction sale volume

Transaction sale volume, according to estimates based on caveats lodged for industrial properties, fell 3 per cent in 2025 compared with 2024. Meanwhile, rental transaction volume rose 2 per cent in 2025 from 2024. 

During the quarter, JTC allocated a total of 67,800 sq m of ready-built facilities (RBF) to industrialists. This included 33,700 sq m of high-rise space and 29,300 sq m of land-based factory space. 

The total amount of RBF space returned in Q4 amounted to 103,900 sq m, of which 47,700 sq m was high-rise space and 37,300 sq m was land-based factory space.  

Among the high-rise space that was allocated, about 39 per cent was in JTC’s newer developments, which included JTC Defu Industrial City, Bulim Square and 1 North Coast. 

In the coming year, JTC expects 1 million sq m of industrial space to be completed, with about half of that in single-user factory space. Warehouse space will account for 29 per cent of the supply, while multiple-user factory space will account for 16 per cent. The remaining 2 per cent will come from business park space. 

In 2027 and 2028, an additional 2.5 million sq m of industrial space is expected to be completed. This translates to an average annual supply of about 1.1 million sq m from 2026 to 2028.

In comparison, the average annual supply and demand for industrial space were about 800,000 sq m and 600,000 sq m over the past three years, respectively.

Catherine He, Colliers’ head of research for Singapore, expects industrial rents in 2026 to rise at a more subdued pace of between 1 and 3 per cent, and industrial prices, between 3 and 5 per cent. 

Gross domestic product is expected to moderate from 4.8 per cent in 2025 to between 1 and 3 per cent in 2026, reflecting a more challenging global backdrop, she said. 

“These less favourable conditions, including the lagged impact of tariff‑related prime pressures and the expected cooling of the AI (artificial intelligence)‑driven technology cycle after its surge in 2025, are likely to dampen business expansion and investment intentions in the coming year.” 

Growth in factory rents and prices is expected to slow, as global trade uncertainties continue to weigh on manufacturing activity and export demand, He said. 

Business park performance could pick up as it becomes a viable alternative for occupiers this year, supported by an anticipated pickup in office rents and growing interest from cost‑conscious occupiers seeking decentralised workspace options, she added. 

Prime logistics rental growth, which has climbed rapidly in recent years, is expected to moderate, tempered by persistent tenant resistance and competition from the Johor-Singapore Special Economic Zone, said Brenda Ong, Cushman & Wakefield’s executive director for logistics and industrial markets.