Singapore industrial market seen stable into early 2026

The headline PMI edged up from 49.9 in July to 50.1 in September.

Singapore’s industrial market is expected to remain stable through the end of 2025 into early 2026, with investor appetite holding firm as interest rates ease, according to Knight Frank.

In its report, the firm noted demand continues to centre on high-quality, long-lease assets such as warehouses, data centres, and specialised manufacturing facilities. Factory values are projected to rise by 3–5% in 2025.

However, older business parks in the East and West are seeing stagnant occupancy, pointing to a growing need for repositioning and asset upgrades.

In the broader economy, Singapore’s GDP grew 2.9% YoY in Q3 2025, a slowdown from 4.5% in the previous quarter.

Quarter-on-quarter, the economy expanded 1.3%. Goods-producing industries rose by 0.6% YoY, supported by a 3.1% increase in construction. Manufacturing was flat compared to a year earlier but saw a 6.1% rebound from Q2’s contraction.

August factory output declined 7.8% YoY, though segments such as transport engineering (+18.9%) and chemicals (+3.5%) posted growth. Business sentiment improved, with the outlook for the second half of the year turning net positive at +5.0%, up 11 percentage points.

Purchasing Managers’ Index (PMI) readings showed signs of stabilisation. The headline PMI edged up from 49.9 in July to 50.1 in September, whilst the electronics PMI rose from 50.2 to 50.7 over the same period.

Semiconductor demand, restocking activity, and early signs of a tech-cycle rebound supported the sector, though broader trade risks remain due to tariffs.

In the industrial property sales market, notable Q3 transactions included a $354m data centre at 51 Serangoon North Avenue 4 and EZA Hill’s $329m acquisition of five logistics and industrial assets.

Despite these deals, overall sales volume declined to $1.5b—down 34.1% QoQ and 53.6% YoY—amid rate uncertainty. New supply from 2025 to 2029 is estimated at about 43.3 million square feet of gross floor area.

Leasing activity softened slightly, with 3,168 new tenancies signed (down 5.7% QoQ and 4.1% YoY). Rental transaction value fell 7.0% to $28.1m, whilst island-wide median rents remained largely stable, with some increase in the lower and mid-tier segments in September.

In terms of sector activity, ST Engineering opened a 10,000-square-metre engine maintenance facility in Paya Lebar, with plans to double capacity by 2027 to meet growing aerospace demand.

In logistics, PSA and COSCO signed an MoU to co-develop a warehousing and logistics hub at Tuas Port from 2027. Sheng Siong also announced it will relocate its headquarters and distribution centre to a new 61,300-square-metre facility in Sungei Kadut.

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