Singapore’s Industrial Property Market Expands to 54 Million Sqm Despite Slight Dip in Occupancy

Published: July 2025 | BSR2.com

Singapore's industrial real estate market saw continued growth in the second quarter of 2025, reaching a total stock of 54.0 million square metres of industrial space. According to the latest report by JTC Corporation, this expansion came amid a slight 0.2 percentage point decline in overall occupancy, bringing the rate to 88.8%. The softening was primarily due to an influx of new supply entering the market.

Among the key completions were World Gateway 2, a modern warehouse facility, and JTC Space @ Ang Mo Kio, a multiple-user factory development. These additions contributed to the increase in supply, although occupancy has remained largely stable at approximately 89% since 2023.

Rental Trends Show Modest Growth Amid Stabilisation

While rental growth persisted across industrial property segments, the pace of increase moderated. The rental index rose 0.7% quarter-on-quarter (QoQ) and 2.0% year-on-year (YoY)—marking the slowest annual growth since 2021.

• Multiple-user factories posted the strongest rental growth at 2.2% YoY.

• Single-user factories and business parks saw smaller but positive gains.

• Overall rental transaction volume climbed by 8% YoY, signalling ongoing activity despite slower growth.

Prices Rise, Though Demand Softens

On the pricing front, the industrial price index climbed 1.4% QoQ and 5.5% YoY, with multiple-user factories leading at 6.4% growth. However, the total transaction volume fell by 18% YoY, indicating tempered demand amid price resilience.

Government Land Sales and Facility Allocations

In the second quarter of 2025, three out of four industrial sites released under the Government Land Sales (GLS) programme were successfully awarded:

• Gul Drive (single-user site): S$703 psmppr

• Jalan Papan (single-user site): S$535 psmppr

• Tukang Innovation Drive (multiple-user site): S$1,753 psmppr

The site at Penjuru Road was not awarded as it did not meet the reserve price.

JTC also allocated 41,200 sqm of ready-built facilities (RBF) during the quarter. Of this, 32,300 sqm consisted of high-rise spaces, with newer projects such as Bulim Square, TimMac @ Kranji, and JTC Logistics Hub @ Gul making up 22% of the total allocation.

Meanwhile, 127,600 sqm of RBF space was returned—primarily due to lease expirations and business consolidations.

Market Outlook: Stable Yet Cautious

Looking forward, approximately 0.3 million sqm of new industrial space is expected to be completed in H2 2025, with a further 2.9 million sqm projected to come online by 2027. This translates to an average annual new supply of 1.3 million sqm, significantly outpacing the historical average demand of 0.6 million sqm observed over the last three years.

JTC notes that the industrial property market is expected to remain stable in the near term, barring any sharp economic downturn. However, increasing supply levels may introduce downward pressure on occupancy and rental rates.

Algene Toh

Senior Real Estate Salesperson

Asset Investment Brokers Pte Ltd

Email: admin@bsr2.com

Phone: +65 9008 8002

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