
Singapore industrial leasing volume increases by 1.3% in Q1
The number of tenancies reached almost 3,000 during the quarter.
Singapore’s factory and warehouse segments saw stable leasing momentum in Q1 according to a Savills report, with total leasing volume increasing marginally by 1.3% YoY to 2,902 tenancies. Considering the challenging business climate, overall demand showed some signs of softening as occupiers are adopting a wait-and-see attitude.
“Businesses are delaying their leasing decisions and reevaluating their space requirements. In the reviewed quarter, warehouse logistics is the most active segment with 6.1% more tenancies from a year ago. While multiple-user factory recorded a steady demand in Q1 (+1.7% YoY), single-user factory demand continued to soften (-16.0% YoY),” the report added.
Here’s more from Savills:
Notwithstanding subdued occupier demand for factory space, the overall factory vacancy rate eased on the back of tight supply. Additionally, because there was a removal of some single-user factory stock, the vacancy rate fell by 0.6 of a percentage point (ppt) QoQ to 11.4% in Q1. The vacancy rate for multiple-user factory also dipped to 8.7% in Q1, compared with 9.0% in Q4/2024.
On the other hand, the vacancy rate for warehouse space rose by 1.0 ppt QoQ to 9.5% in Q1. This was attributed to the addition of over 1.0 million sq ft of new warehouse stock from the completion of DB Schenker’s RedLion2 at 33 Greenwich Drive and a redeveloped ramp up logistics hub at 36 Tuas Road.
Following a rental growth of 0.5% QoQ in Q4/2024, JTC’s rental index for all industrial property continued increasing at the same pace in Q1/2025. Notably, JTC’s single-factory rental index rose at a faster rate at 0.8% QoQ in Q1, compared with 0.1% QoQ in the previous quarter. This could be attributed to the newly completed single-user factories with modern and high-tech specifications, which generally command higher rents. Despite the faster rental growth for single-user factory, overall industrial rental growth was moderated by the muted growth for multiple-user factory and warehouse, which grew by 0.3% and 0.6% QoQ respectively in Q1.
Based on Savills’ basket of private industrial properties, the monthly rents for prime multiple-user factory rose after a short-lived dip (-0.4% QoQ) in the previous quarter, inching up 0.4% QoQ to S$2.29 per sq ft in Q1. On the other hand, with the anticipated surge in warehouse supply this year, some landlords are more flexible with their rental negotiations to retain tenants. As such, Savills’ prime warehouse and logistics properties monthly rents weakened by 2.5% QoQ to S$1.69 per sq ft in Q1.