Singapore warehouse demand softens amid supply surge: report

Supply in 2027 is projected to remain elevated at around 5 million square feet.

Demand for warehouse space in Singapore is showing signs of softening, driven by economic uncertainty and a growing pipeline of new supply, according to data from S&P Global Ratings and JTC Corp.

Occupiers are increasingly cost-conscious due to macroeconomic pressures, putting older industrial facilities under strain. At the same time, warehouse rents remain on an upward trajectory.

The rental index, which was benchmarked at 100 in Q4 2012, rose from around 80 in early 2020 to over 100 by the second quarter of 2025.

However, vacancy rates tell a different story. After declining to about 8–9% between 2021 and 2023, the rate has reversed course, climbing to approximately 11% by Q2 2025. The rising vacancy trend coincides with expectations of continued supply additions.

Forecasts suggest a significant pickup in new warehouse completions, with over 5.5 million square feet expected in 2025, well above the historical annual average of 3.5 million square feet.

Supply in 2027 is projected to remain elevated at around 5 million square feet, raising concerns about potential oversupply and further vacancy increases.

Still, some tailwinds remain. Analysts note possible demand upside from companies reshoring supply chains to countries like Singapore, which offer relatively competitive tax environments.

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