Singapore factory rental rates see steady growth

Proposed US tariffs may accelerate manufacturing shifts to Southeast Asia.

The rental indices for multiple and single-user factories stood at 0.4% and 0.1% quarter-on-quarter, respectively, reflecting a 3.8% and 3.2% annual growth for 2024, according to Colliers.

New projects completed in the year propped up rents which remained relatively unchanged at 1.68. However, occupancy rates declined in the multiple-user factory.

The report said that the proposed US tariffs on goods would likely accelerate the shifts in manufacturing supply chains to Southeast Asia, including Singapore. Given its role as a re-exporting hub, businesses may set up production plants here to circumvent import requirements.

Singapore will also benefit from this trend as firms want a stable and geopolitically neutral location to diversify their risks or set up operations.

“Continuing the trend from the previous quarters, the pressure from subdued demand coupled with an increase in supply is expected to temper the growth in rentals and prices,” Colliers said.

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