Singapore industrial market sees widening gap between prime and ageing assets

Rents inched up by 0.4% in Q1.

Singapore’s industrial property market entered 2026 on stable footing, with rents and prices continuing to rise, although occupiers are becoming increasingly selective and operationally focused in their space requirements, according to Colliers.

In its Industrial Insights Q1 2026 report, Colliers said the JTC All Industrial rental index rose 0.4% quarter-on-quarter, while prices increased 1.2%. However, the consultancy noted a widening performance gap between modern, high-specification facilities and older industrial stock.

“Occupiers are now taking a more practical view of space, how quickly it can be operationalised, how efficiently it runs, and whether it supports future workflows. This scrutiny is widening the performance gap,” said Catherine He, Head of Research at Colliers Singapore.

Colliers said the trend is visible across all industrial segments. In the factory market, newer developments continue to attract demand from high-value industries such as precision engineering, while the broader market has begun to cool. In the warehouse sector, tenants remain focused on operational efficiency, with no new prime warehouse supply expected until 2027, supporting the outlook for well-located assets.

The consultancy added that business park performance is becoming increasingly cluster-specific. While vacancy has risen in outlying locations, strategic initiatives including JTC’s planned AI park at one-north and LaunchPad @ PDD are expected to support demand in core technology hubs.

Nicolas Menville, Executive Director and Head of Singapore-based Industrial Clients at Colliers, said the sector’s multi-year upcycle has ended and future performance will depend heavily on asset quality. He noted that landlords of ageing properties may need to reposition assets to avoid obsolescence, while occupiers have an opportunity to secure modern facilities that improve long-term operational resilience.

Looking ahead, Colliers expects manufacturing growth to remain uneven. The electronics sector is projected to outperform on strong semiconductor demand linked to AI investment, while other manufacturing segments may face production cuts or delayed expansion plans amid supply disruptions and cautious market sentiment.

Despite ongoing trade and political uncertainty, Colliers said occupiers are becoming more adaptable by restructuring supply chains to be more regional and resilient. The consultancy expects this to support steady tenant demand and moderate rental and capital value growth over the medium term, while reinforcing the growing divide between prime industrial assets and older stock.