Singapore business park vacancies increase to 22.9% in Q4

This is despite signs of easing vacancies in older business park clusters.

Singapore’s business park market closed 2025 with stable occupancy levels but elevated vacancy rates, as tenant relocations into newly completed developments reshaped sub-market dynamics, according to a report by Savills.

Vacancy Rate Holds Steady Quarter-on-Quarter

Savills reported that the islandwide vacancy rate for business park space remained unchanged at 22.9% in Q4/2025 compared with the previous quarter.

The consultancy noted that some tenants continued transitioning into newly completed developments, resulting in higher vacancies in specific sub-markets where these projects were delivered. However, on an aggregate basis, overall occupancy levels were broadly stable in the final quarter of 2025.

On a year-on-year basis, the islandwide vacancy rate increased from 22.1% in Q4/2024 to 22.9% in Q4/2025, despite signs of easing vacancies in certain older business park clusters located in the East and West Planning Regions.

Rental Growth Remains Resilient

Despite muted demand conditions, rental growth in the business park segment proved resilient through 2025.

According to Savills, JTC’s business park rental index rose at a faster pace of 2.6% for the year. In the private market, Savills’ standard business park rents recorded a modest pickup, rising 2.0% year-on-year (YoY) to S$4.12 per sq ft in Q4/2025.

Prime business park assets outperformed, with Savills reporting that prime rents increased 2.8% YoY to a new record high of S$6.45 per sq ft in Q4/2025.

The firm attributed this resilience to continued occupier preference for high-quality, well-located developments, even amid broader economic caution.

High-Spec Industrial Rents Edge Up

In the high-specification industrial segment, rental growth was more subdued but remained positive.

Savills noted that high-spec industrial rents increased 0.5% YoY to S$3.94 per sq ft in 2025, reflecting measured demand and a competitive leasing environment.

Outlook: Flight to Quality to Support Prime Assets

Savills’ data suggests a market characterised by stable overall occupancy but ongoing sub-market adjustments driven by new supply and tenant relocations.

While vacancy rates remain elevated, particularly on a year-on-year basis, rental resilience — especially in prime business park developments — points to a continued “flight to quality” trend. In the near term, demand is expected to remain selective, favouring modern, specification-rich spaces that meet evolving occupier requirements in Singapore’s business park and high-spec industrial landscape.