In 4Q2025, the occupancy rate for all industrial space in Singapore declined by 0.4 percentage points (ppts) q-o-q, settling at 88.7%, according to JTC’s latest quarterly market report, released Jan 22.
This decline was primarily driven by strong completions, leading to an increase in total industrial stock by 345,000 sqm and reversing the decrease in industrial stock in the previous quarter.
For the full year of 2025, the overall occupancy rate dropped slightly by 0.3 ppts, as strong completions added 0.9 million sqm of total available stock and outpaced the 0.7 million sqm increase in occupied stock.
The rental index for all industrial space continued to moderate in 4Q2025, recording a slower growth of 0.5% q-o-q. Still, this marks the 21st consecutive quarter of rental increase.
For the entire year of 2025, the rental index rose by 2.4%, slower than the 3.5% increase in 2024 and marked the slowest annual growth since 2021.
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The rental index has increased by 25.9% since the trough in 3Q2020.
Meanwhile, the price index for all industrial space in 4Q2025 rose by 1.4% q-o-q and 5.0% y-o-y.
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To ensure sufficient supply and support the demand from industrialists, the government has been increasing the supply of land in the Industrial Government Land Sales (IGLS) programme.
In 2025, 10 IGLS sites totalling 12.8ha was successfully awarded, higher than the five sites totalling 10.5 ha in 2024.
As at end-2025, around 1.0 million sqm of new industrial space is expected to be completed in 2026, with a further 1.6 million sqm of space expected to come onstream in 2027.
In comparison, the average annual supply and demand of industrial space were around 0.8 million sqm and 0.6 million sqm respectively over the past three years.
Barring a sharp economic downturn, occupancy is likely to remain stable and rental rates are expected to continue to moderate, says JTC.
JTC’s outlook
In 2026, an estimated 1.0 million sqm of industrial space could be completed based on planning approvals as of end-2025.
About 53% of the supply is single-user factory space, typically developed by the industrialists for their own use.
Warehouse constitutes another 29% of the supply. Meanwhile, multiple-user factory space and business park space make up another 16% and 2% of the supply respectively.
In 2027 and 2028, an additional 2.5 million sqm of industrial space is expected to be completed. This amounts to an average annual supply of about 1.1 million sqm from 2026 to 2028.
As a comparison, the average annual supply and demand of industrial space were around 0.8 million sqm and 0.6 million sqm respectively over the past three years.
Prices to rise by 3%-5% this year: Knight Frank
There was a “notable increase” in sales of leasehold factories with remaining tenures of less than 30 years compared with a year ago, says Leonard Tay, research head at Knight Frank Singapore.
This points towards a broader shift and acceptance in investor appetite for shorter-tenure industrial assets, he adds.
“Despite the economy performing better than initially expected, business owners and institutional investors continue to operate amid persistent headwinds. In this context, factories with shorter remaining leases may present an attractive value proposition of providing stable income returns and potential pricing flexibility as investors navigate a more uncertain operating landscape,” writes Tay.
Such opportunities are likely to remain in 2026, complementing continued demand for prime and freehold industrial assets. As a result, Knight Frank expects industrial property prices to rise by 3% to 5% over the full year.
Prime, freehold industrial assets will continue to attract strong interest, says Tay. However, industrial leasing activity in 2026 is expected to remain measured, as occupiers continue to adopt cost-optimisation strategies amid an uncertain operating environment.
With the completion of the Johor Bahru–Singapore RTS Link in end-2026, some firms may relocate non-core and backend functions across the Causeway, says Tay. “However, any additional space released into the market is likely to be absorbed by other occupiers seeking to strengthen operational resilience as part of their business continuity planning, thereby limiting any decline in overall leasing volumes.”
Hence, Tay expects rental levels to remain broadly stable with some moderate growth of between 1% and 3%.
“However, the rental outlook for older non-centrally located business parks is likely to be less sanguine, with growth generally plateauing in 2026,” warns Tay.
In 4Q2025, business park occupancy rates of 73.0% was recorded in the east region, 63.0% in the west region and 58.6% in the north-east region.
JLL forecasts narrower 3%-4% price growth
Singapore’s industrial property market remained resilient through 2025, supported by ongoing global supply-chain realignment and periods of front-loaded trade flows amid tariff uncertainty, says Chua Yang Liang, head of research and consultancy, Southeast Asia, at JLL.
As a result of an increase in completions in the quarter, occupancy came under pressure although demand fundamentals stayed firm and rental growth continued to dominate market sentiment, Chua adds.
Looking ahead, Chua is “cautiously optimistic” for the outlook of Singapore’s industrial space in 1H2026.
“While downside risks persist — particularly if tariff measures begin to bite as front-loaded inventories normalise — continued AI-led investment and resilient electronics demand should provide support, especially for higher-specification industrial and logistics assets,” says Chua.
Rents are likely to remain on this path alongside prices, Chua adds. “We estimate the All Industrial Rental Index for the full year 2026 may see a moderate upside of 1%-2% given the higher expected completion and slower global economic growth. All Industrial Price Index should record another upside of 3%-4% as liquidity continues to churn in a lower capital cost environment driving further yield compression.”
CBRE watching supply squeeze, JS-SEZ impact
Over the next three years, the only business park project in the pipeline is 27 IBP (0.21 mil sq ft), scheduled for completion in 2026.
As more landlords evaluate and undertake asset enhancement initiatives to upgrade the specifications of aging facilities, supply is projected to tighten, says Tricia Song, CBRE research head, Singapore and Southeast Asia.
Looking ahead, new supply for the prime logistics market is expected to be approximately 0.8 million sq ft, a “significant moderation” from 2025’s new supply of 5.6 million sq ft, says Song.
With most of the supply in 2026 already pre-leased, options could be limited for occupiers, she adds.
As at 4Q2025, CBRE’s prime logistics occupancy rate is 94.8%. It is anticipated that this rate may gradually increase towards 96%-97% by end-2026. “Therefore, the tighter market suggests stronger rental growth in 2026 for the prime logistics segment.”
Singapore-based firms have committed over $5.5 billion of investments in Johor after the Johor-Singapore Special Economic Zone (JS-SEZ) deal.
Companies are leveraging a “twinning model” by setting up complementary operations across both locations, notes Song.
For example, Olam Food Ingredients (ofi) has a Customer Solutions Centre in Singapore to develop market insights, supported by an advanced production facility in Johor to customise solutions for beverages, bakery and frozen dairy desserts.
“We expect the JS-SEZ to gain momentum in 2026 as Singapore and Malaysia jointly compete for global investments and attract new businesses,” writes Song.
Infographics: JTC
