Singapore’s industrial leasing market remained resilient in 2025, though performance is becoming increasingly uneven. Multi-user factory rents rose 1.8% y-o-y in 4Q25, moderating amid a sharp rise in completions, while vacancies edged up as new supply is gradually absorbed. Business Park rents increased 2.6% y-o-y, supported by strong take-up at newer developments such as Punggol Digital District, although recent supply pushed vacancy slightly higher. Warehouse rents grew 3.0% y-o-y despite record supply, with stable vacancy reflecting healthy absorption driven by logistics and e-commerce demand.
A clear flight-to-quality trend persists, with modern, high-specification assets outperforming older stock. While macroeconomic risks remain, staggered upcoming supply and structural demand linked to infrastructure initiatives such as Tuas Mega Port should support a selectively positive outlook into 2026.
Key Takeaways:
- Industrial fundamentals remain stable, though asset performance is increasingly uneven.
- Flight-to-quality trends continue favoring modern, high-specification industrial developments.
- Multi-user factory vacancy rose on completions, but oversupply risks remain contained.
- New business parks outperform older stock amid constrained near-term supply.
- Warehouse rents held firm despite record supply and macro uncertainty.
- Major 2027 warehouse completions may pressure West rents, though demand persists.
