Industrial prices rise 1.5% q-o-q in 1Q2025

According to the latest industrial statistics published by JTC on April 24, the all-industrial price index increased 1.5% q-o-q in 1Q2025. Despite the price increase, industrial property sales activity last quarter decreased compared to 4Q2024. There were 355 transactions in 1Q2025, and total sales value declined 33.9% q-o-q to $680.9 million.

Noteworthy deals in 1Q2025 include the sale of a single-user factory at 23 Lok Yang Way for $70.1 million in March, and the transaction of a multiple-user factory at New Industrial Road for $62 million in February.

At the same time, the all-industrial rental index expanded by 0.5% q-o-q, while overall occupancy stayed unchanged from the 89% rate in 4Q2024. This marks the 18th consecutive quarterly growth in rents to reach its highest level in 2Q1996.

The occupancy rate in business parks fell to 75.9% in 1Q2025. “The decline in occupancy in the business park sector was due to the completion of new supply, such as the Punggol Digital District (PDD) in the northeast region,” says Leonard Tay, head of research at Knight Frank Singapore. He adds that as more occupiers who have pre-committed space in PDD complete their fit-out and start operations, the occupancy rate in the northeast is expected to strengthen.

The weakest growth in industrial rents was recorded in the single-user factory segment, which fell 4.3% q-o-q. Chua Yang Liang, head of research and consultancy, Southeast Asia, at JLL, notes that the decline has erased the rental gains the segment gained in 4Q2024 and furthers the quarterly contraction of 0.3% that was recorded in 3Q2024.

“The available stock in this subsector has also contracted for the first time since 2018, by 0.4% q-o-q, furthering the structural shift in our industrial landscape towards higher productivity and value-added sectors in the digital and green economies,” says Chua.

The latest industrial statistics comes after the Ministry of Trade and Industry (MTI) estimates that the manufacturing sector expanded 5.0% y-o-y in 1Q2025. But on a quarterly basis, the manufacturing sector shrank 4.9% in 1Q2025.

“While the industrial real estate sector has been characterised by consistent stability and resilience, it remains to be seen whether it can weather the uncertainty that has ratcheted up with the US tariffs,” says Tay.

He adds that as tariffs and retaliatory tariffs slow global trade flows, Singapore’s manufacturing, electronics, and logistics sectors are expected to be impacted given the country’s heavy reliance on exports and global trade. This will likely delay transactions in the local industrial real estate market as buyers and enterprise occupiers wait for the situation to unfold, says Tay.

According to Cathrine He, head of research at Colliers Singapore, the supply of industrial space is expected to increase significantly from now till end-2027, amounting to an average supply of around 1.1 million sqm from now until end-2027.

“Amidst the ongoing uncertainties, JTC has sought to provide industrialists with more certainty by extending leases for development sites, while also providing more flexibility for renewals. This could encourage more end-users to develop or own their own facilities,” says He.

The ongoing tariff situation is expected to result in a larger-than-expected pullback in economic activity that could affect industrial leasing activity as well as dampen consumption, especially in non-discretionary items, adds He.