Singapore industrial leasing volume hits record lows since 2020

There were only 2,866 tenancies in Q1.

According to a Savills report, Singapore’s industrial leasing momentum has slowed on the back of weak global trade demand. The overall industrial leasing volume registered a decline of 7.7% YoY to 2,866 tenancies in Q1, hitting the lowest level since 2020.

Leasing volume tapered off across all segments, especially for single-user factory space (-11.3% YoY). While demand for factory space softened as some firms could have curtailed expansion plans as part of their cost saving strategies, the momentum in the logistics leasing market also moderated amid weaker ecommerce demand and international trade. 

Here’s more from Savills: 

Furthermore, the gap between landlord and tenant expectations on rents may have widened, especially for more recent completions which incurred higher development costs. Besides the rental increase, the increase in the total value of rental transactions (+3.0% YoY) could be due to growing interest in larger premises, especially for multiple-user factory and warehouse spaces. 

In terms of vacancy, single-user factory vacancy inched up again by 0.2 of a percentage point (ppt) QoQ to a new record high at 12.2% in Q1. While vacancy for multiple-user factories remained flat at 9.5% in Q1, those for warehouses rose to 8.9% (+0.5 of a ppt QoQ) as supply outweighed demand. 

The index of general industrial rents tracked by JTC showed that industrial rents extended growth into 2024, rising by 1.7% QoQ again in Q1. While rents for the single-user factory and warehouse segments recorded a faster pace of growth at 2.1% QoQ and 2.0% QoQ respectively, those for the multiple-user factory segment rose at a moderated pace of 1.3% QoQ. Meanwhile, Savills’ monthly prime industrial rents reached a record high since our data was constituted. While warehouse and logistics property2 rents rose 2.0% QoQ to S$1.68 per sq ft, multiple-user factory3 rents saw an uptick of 0.5% QoQ to S$2.23 per sq ft in Q1.