Logistics rents hold steady in Q2

Demand for higher-specification facilities remained stable despite rising freight costs and geopolitical uncertainty.

Gross effective rents for logistics and warehouse properties averaged $1.72 psf per month in the second quarter of 2026, according to JLL.

Rents were unchanged from the previous quarter but increased 0.6% YoY as occupiers became more resistant to higher costs.

The islandwide vacancy rate stood at 10.3%. Year-to-date net absorption reached approximately 500,000 sq ft, whilst completions totalled 900,000 sq ft.

JLL said demand for higher-specification logistics and warehouse facilities remained stable despite higher freight costs linked to conflicts in the Middle East.

New operations opened during the quarter included Uniserve’s distribution centre at Mapletree Logistics Hub Toh Guan and SingPost’s automated sorting hub at the Regional E-commerce Logistics Hub in Tampines.

Supply remained limited, with Tiong Nam Logistics’ owner-occupied facility at 25 Senoko Loop being the only project completed during the quarter.

Two developments were added to the supply pipeline. Lucky Joint Construction secured a site at Gul Drive for completion in 2028, whilst Extra Space Asia is developing a built-to-suit self-storage facility at Kaki Bukit Avenue 5 scheduled for 2029.

Average capital values and investment yields were unchanged during the quarter amid cautious market sentiment.

JLL expects demand for higher-specification properties to remain resilient. However, geopolitical tensions and greater cost sensitivity amongst occupiers could limit rental growth in the second half of 2026.

Capital values could grow faster than rents and compress yields by year-end, supported by investor demand for quality logistics and warehouse assets.

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