Fri, Jun 25 2025
According to the research report by Colliers released in February, industrial property prices and rents in Singapore are expected to see a decrease this year due to higher supply and weaker demand. The firm predicts a moderate growth of 0% to 2% for both rental and prices in 2025, compared to the 3.5% growth seen last year.
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Colliers notes that JTC’s 4Q2024 data shows a market that is losing steam. The JTC All Industrial rental index has seen growth for the 17th consecutive quarter, rising 0.5% quarter-on-quarter (q-o-q) and an overall growth of 3.5% for the year. However, this is a significant decline from the 8.9% rental growth recorded in 2023. Similarly, the price index also grew 0.5% q-o-q in 4Q2024, which is lower than the 1.2% growth seen in the previous quarter. In 2024, industrial property prices only rose by 2.1%, less than half of the 5.1% increase seen in the previous year.
The report states that the supply of industrial space is expected to increase this year, with over 2.5 times the supply seen last year, before tapering off from 2026 onwards. This surge in supply has created an imbalance in the market, with some segments seeing slower pre-commitments or completed projects with lower occupancy.
The higher supply, combined with rising interest rates and operating expenses, is expected to continue to dampen rental growth. The uncertainty in global markets due to heightened trade protectionism may also impact business confidence and investment decisions.
However, Colliers also notes that demand for industrial space is expected to be supported by the semiconductor, logistics, and advanced manufacturing sectors. As policies become clearer and market sentiments improve, industrial leasing activities are expected to gradually increase over time, driven by the ongoing upturn in the chip cycle.
In the short term, the expected surge in supply and projected rental moderation could benefit tenants, as there will be more options available in the market. The report notes that newer industrial developments with modern specifications may encourage businesses to move from older, aging manufacturing spaces to newer projects.
Nicolas Menville, executive director and head of Singapore-based industrial clients for Colliers, believes that this could be a good year for tenants. He notes that the increased supply of modern industrial properties may prompt businesses to relocate, increasing competition and potentially driving rental prices down.