Storage gap pushes Singapore builders to Johor

Unless storage is treated as core infrastructure, growth will stall.

A lack of long-term storage space in Singapore is constraining construction sector growth and pushing builders to move prefabrication storage into Johor, Malaysia, a shift that raises logistics costs and adds execution risk.

“Storage sits in the policy blind spot, so it’s too temporary for long-term planning, too unprofitable for private investments and too logistical for traditional construction frameworks,” Avtandil Mekudishvili, Asia Pacific regional lead at PlanRadar Singapore Pte. Ltd., told Singapore Business Review.

Most builders rely on temporary occupation licences that allow short-term use of vacant state land for storage, often renewed monthly or annually, creating uncertainty that discourages capital investment and long-term planning.

“Because these licences are short-term, reworkable and unpredictable, firms cannot justify investing in racking system automation or proper hardstands,” he said via Zoom.

That uncertainty has already pushed companies beyond Singapore’s borders. Seah Kiin Peng, president of the Prefabrication Association of Singapore for Precast & Steel Ltd. (PFAPS), said limited local storage has driven members to secure facilities in Johor, increasing transport costs, extending lead times and adding cross-border risk.

Fragmentation across the sector worsens the issue, with each prefabrication firm managing storage on its own whilst public agencies focus on separate mandates, leaving no single owner for prefabrication logistics, Mekudishvili said.

“Until storage is treated as a core urban infrastructure, the industry will continue to hit a soft ceiling,” he added.

The lack of storage also weakens the shift towards Design for Manufacturing and Assembly — where building components are produced off-site before installation — limiting the ability to match factory output with on-site installation schedules, he pointed out.

Operational strain escalates quickly when space runs out, forcing factories to halt production after delivery stoppages even as fixed costs continue to accrue, compressing margins for precast manufacturers, PFAPS Vice President Lim Siew Howe told Singapore Business Review.

“You still got your cost that you need to pay, so you cannot run away, but suffer the losses,” he said in a Zoom interview.

Integrated Construction and Prefabrication Hubs have yet to resolve the bottleneck, with some facilities operating at less than half capacity because insufficient storage disrupts production flow, Er. Dr. David Ng, chairman of the civil and structural technical committee at The Institution of Engineers, Singapore, told Singapore Business Review.

Closer coordination between off-site manufacturing schedules and on-site construction timelines remains critical to improving use, he said in an emailed reply to questions.

“This involves better communication and leveraging technology such as artificial intelligence to anticipate delays and adjust production schedules accordingly,” he added.

Industry groups have also called for changes in risk allocation. Treating precasters as suppliers rather than subcontractors would transfer inventory and payment pressure back to main contractors, reducing financial stress caused by storage delays, Seah said.