What does the future hold for Singapore’s industrial property market?

Major leasing decisions are expected to be delayed.

In a report, Savills noted that notwithstanding the higher-than-expected economic growth in Q3, growth is projected to wane as activity in trade-related sectors normalises after the flurry of front-loaded manoeuvres in the first half of the year.

“The overall economic outlook remains cautious amid the tariff headwinds and implementation of renewed tariffs. As risks remain tilted to the downside, industrial and logistics businesses may continue to defer major leasing decisions,” the report said.

Here’s more from Savills:

Those who are not ready to commit to new physical space or expansion may consider outsourcing to a 3PL as the tariff regimes stabilise, hence driving leasing demand from 3PLs. For those signing new leases, they are likely to prefer flexible tenancy terms such as short-term commitment and early termination rights. The other priority is cost-saving, where occupiers seek to optimise available space and improve efficiency. Occupiers are also reevaluating capital expenditure decisions to avoid incurring extra CapEx upon lease expiry or relocation.

While leasing momentum could potentially remain muted in the near term, demand for modern and high-spec industrial space is likely to remain resilient as occupiers continue to prioritise space efficiency. Furthermore, with limited pipeline supply for factory and warehouse spaces in the near term, rents and vacancy rate for modern industrial spaces with high specifications are expected to stay firm for the rest of the year.