Logistics rents outpace broader industrial segments on strong Q1 momentum

Some moderation in rental growth could emerge from regional competition.

Prime logistics rents posted their strongest growth in two years, rising 1.5% quarter on quarter in the first quarter of the year, amidst tightening supply and sustained occupier demand.

According to Cushman & Wakefield, it was the fastest pace of growth since Q1 2024—outpacing all other industrial segments.

As transportation costs rise, the report said companies are increasingly prioritising logistics assets that can optimise distribution networks and reduce operating expenses.

Notably, there are no major new prime logistics developments, creating a supply gap that is expected to keep vacancy rates low and competition for space high.

Whilst near-term fundamentals remain strong, some moderation in rental growth could emerge from regional competition.

The development of the Johor-Singapore Special Economic Zone may encourage certain occupiers to explore lower-cost alternatives across the border.

Despite external uncertainties, the outlook for prime logistics rents in Singapore remains positive, the report said.