Singapore business parks remain bifurcated as occupiers favour newer assets

Vacancy in the East reached a record 29.6% due to softening demand.

Singapore's business park market remained sharply divided in the second quarter, with newer developments attracting occupiers while older clusters continued to face elevated vacancies and leasing pressure, according to Savills.

The completion of 27 IBP added further supply in the West Region, pushing vacancy to 37.6% from 35.9% in the first quarter. In the East, vacancy reached a record 29.6% amid weakening demand.

The Central Region provided a contrast, with continued tenant move-ins at the Geneo cluster in Science Park lowering vacancy to 22.1% from 23.3%, its lowest level since Geneo's completion in early 2025. Savills said the improvement brought the islandwide business park vacancy rate down from 23.3% to 22.1%.

Rental performance reflected the challenging conditions in older clusters. JTC's business park rental index slipped 0.1% quarter-on-quarter, while Savills' standard business park rents fell 0.8% to S$4.11 per sq ft.

Prime assets proved more resilient, with Savills' prime business park rents declining just 0.2% to S$6.72 per sq ft. Savills said the relatively limited decline underscored occupiers' continued preference for higher-quality workplaces with stronger specifications, sustainability features and tenant amenities.

The flight to quality also extended to high-specification industrial properties. Rents in the segment rose 0.6% quarter-on-quarter to S$3.92 per sq ft, ending three consecutive quarters of decline.

Savills said steady demand from technology, advanced manufacturing and business services occupiers continued to support newer, better-equipped facilities, widening the performance gap between modern assets and older industrial stock.