Industrial firms’ caution persists but occupier demand holds firm: CBRE

Most tenants in the sector are still opting to renew their leases.

Whilst the industrial businesses are showing increased caution by adopting a 'wait-and-see’ attitude, occupier inquiries are still resilient, according to CBRE Research.

Tricia Song, head of research at CBRE Singapore and Southeast Asia, said that given Singapore’s location, workforce, and business environment, most tenants are still opting to renew their leases.

With expansionary demand cooling down, some landlords are responding quickly by being accommodating and offering incentives to entice tenants to relocate.

However, with more prime logistics facilities expected to enter the market over the next nine months, CBRE anticipates near-term pressure on prime logistics rental rates.

Despite this, newer and more centrally located logistics assets are expected to be more resilient compared to older properties or those with less advanced specifications.

The Ministry of Trade and Industry (MTI) announced that Singapore’s GDP growth forecast for 2025 has been downgraded to “0.0–2.0%” from “1.0–3.0%” amidst global economic uncertainties.

According to advance estimates from MTI, Singapore’s economy contracted in Q1 2025 as GDP declined by 0.8% quarter-on-quarter on a seasonally adjusted basis, a reversal from the 0.5% expansion in Q4 2024.

The manufacturing sector grew by 5.0% year-on-year in Q1 2025, moderating from the 7.4% expansion in Q4 2024.