Singapore logistics market holds steady with 3PL-led demand

Year-to-date, net absorption reached 1.9 million square feet against 5.8 million square feet of completions

Singapore’s logistics and warehouse property market saw steady leasing momentum in Q3 2025, with leasing enquiries rising quarter-on-quarter.

According to JLL, demand was led by third-party logistics providers (3PLs) and end-users seeking large ambient spaces of 100,000 square feet or more, as well as chiller and freezer units between 40,000 and 120,000 square feet, mainly for wine and food storage.

Notable tenant movements included DSV’s opening of its Red Lion2 facility in July and SEKO Logistics’ relocation to 50 Alps Avenue, taking up 8,000 square feet.

On the supply side, new completions slowed during the quarter. Key additions included the second phase of World Gateway 2, a redevelopment at 5 Toh Guan Road East by CapitaLand Ascendas REIT (CLAR) completed ahead of schedule, and an addition/alteration at Toll City (60 Pioneer Road).

In future pipeline activity, KWE Singapore broke ground on a redevelopment project at 20 Changi South Avenue 2, which will include air-conditioned mezzanine space for temperature-controlled cargo and is scheduled for completion in 2027.

Rental performance remained flat. Islandwide average rents held steady for the fifth consecutive quarter at SGD 1.71 per square foot per month. Capital values and yields also remained unchanged during the same period.

Year-to-date, net absorption reached 1.9 million square feet against 5.8 million square feet of completions, whilst the overall vacancy rate stood at 10.9%. JLL categorized the rental cycle as stable, with zero year-on-year rent growth.

Looking ahead, no new completions for lease are expected in the next 12 months, which may ease pressure on vacancy rates.

However, JLL cautioned that global economic uncertainties could limit near-term demand and cap rental growth over the next six months.

With borrowing costs stabilizing and investor interest holding, yields are expected to remain steady, whilst capital value appreciation is likely to stay muted in the short term due to the flat rental outlook.