Singapore industrial rents to rise by up to 3% this year

The growth is a lot slower than last year’s 10.5% increase.

Notwithstanding the challenges confronting businesses and the global economy, a Savills report said Singapore’s economic growth is likely to come in closer to its potential rate between 2% and 3% this year.

“Following the recent US presidential election, there is an element of heightened concern in Asia. The inflationary economic agenda of the US President-elect Donald Trump could keep interest rates high, and this could weaken future economic growth outlook. The export-driven Singapore economy is also bracing for the likelihood of higher tariffs globally,” the report said.

Here’s more from Savills:

There will be a surge in pipeline supply in 2025, with almost 40% increase from the four-year average historical completion of industrial space. Notably, there will be more warehouse and business park spaces coming on stream next year, hence putting further pressure on the occupancy and rents.

To bolster occupancy rate amid softer demand, landlords are likely to be more generous with incentives such as longer rent-free period and fit-out allowances to attract prospects. Nonetheless, rents across all segments will be bound to remain under pressure in the near term.

As such, compared with the respective rental growth rate of 10.5% and 7.4% YoY in 2023, rents for multiple-user factory, as well as warehouse and logistics space are forecast to rise at a moderate pace of up to 3.0% this year.