Industrial space hits 54 million sqm despite occupancy dip: JTC

Despite this softening, occupancy has remained relatively stable at around 89% since 2023.

Singapore’s total industrial space reached 54.0 million square metres in the second quarter of 2025, even as overall occupancy dipped slightly to 88.8%, according to JTC.

In its report, JTC said the 0.2 percentage point decline from the previous quarter and year was largely due to new supply entering the market, including major completions such as World Gateway 2 (warehouse) and JTC Space @ Ang Mo Kio (multiple-user factory).

Despite this softening, occupancy has remained relatively stable at around 89% since 2023.

Rental growth across the industrial sector continued but showed signs of cooling. The rental index rose 0.7% QoQ and 2.0% YoY, marking the slowest YoY growth since 2021. Multiple-user factories saw a 2.2% annual rental increase, whilst single-user factories and business parks posted smaller gains. Transaction volume for rentals climbed 8% YoY.

Price performance was stronger. The industrial price index rose 1.4% QoQ and 5.5% YoY, with multiple-user factories leading at 6.4% annual growth.

However, the number of transactions dropped by 18% compared to the same period last year, indicating softer demand despite price resilience.

In the government land sales market, three of four sites offered in Q2 2025 were awarded. These included single-user developments at Gul Drive ($703 psmppr) and Jalan Papan ($535 psmppr), as well as a multiple-user site at Tukang Innovation Drive ($1,753 psmppr). A fourth site at Penjuru Road did not meet the reserve price and was not awarded.

JTC allocated 41,200 sqm of ready-built facilities during the quarter, including 32,300 sqm of high-rise space. About 22% of the high-rise allocation was in newer developments like Bulim Square, TimMac @ Kranji, and JTC Logistics Hub @ Gul.

Returns of RBF space totaled 127,600 sqm, mostly due to expiries and operational consolidations.

Looking ahead, 0.3 million sqm of new industrial space is projected for completion in the second half of 2025, with another 2.9 million sqm expected through 2027. This translates to an annual average of 1.3 million sqm in new supply, surpassing the average annual demand of 0.6 million sqm over the past three years.

Unless met with a sharp downturn, JTC said the market is expected to remain stable, though rising supply may exert pressure on occupancy and rents.