Warehouse rents edge up as industrial market steadies: report

Industrial property prices increased by 1.5% QoQ, supported by a 1.9% rise in multiple-user factory prices.

Singapore’s industrial property market posted a stable performance in the first quarter of 2025, with prices and select rental segments continuing to rise despite a surge in new supply and softening occupancy in certain submarkets.

According to the latest ETC Singapore Digest, industrial property prices increased by 1.5% QoQ, supported by a 1.9% rise in multiple-user factory prices.

Rental rates for warehouse and logistics space also edged up by 0.3%, reaching $1.88 per square foot, while rents across other segments, including hi-tech industrial space and business parks, remained flat.

Island-wide industrial occupancy held steady at 89.0%. Within the segments, multiple-user factories saw improved occupancy at 91.3% (+0.3 percentage points), whilst warehouse/logistics and business parks recorded slight declines of one and two percentage points, respectively.

The drop in business park occupancy was attributed to the completion of large-scale developments such as Punggol Digital District and GENEO at Science Park Drive, adding approximately 1.3 million square feet of new space together.

Despite this influx, the market demonstrated resilience with 450,000 sq. ft. of net absorption across these new completions. Analysts noted that demand remained healthy, but warned that the volume of incoming supply could test absorption capacity in the months ahead.

On the manufacturing front, PMI readings dipped slightly to 50.6 in March 2025 (from 51.1 in December 2024), signaling slower but still expansionary growth. The electronics PMI also eased to 50.9, continuing the trend of moderated industrial output growth.

Looking forward, the industrial market is set to face a wave of new supply, with 6.4 million sq. ft. expected to come online over the next three quarters.

Warehouses, multiple-user factories, and business parks are projected to account for the majority of this space. Whilst underlying industrial activity remains solid, analysts expect rental performance to hinge on the market's ability to absorb the new inventory.