The industrial property market ended 2024 on a positive note with JTC’s price index registering a 3.5% y-o-y gain over the entire year. Likewise, the rental index over the 12-month period also saw industrial rents notch a 3.5% y-o-y increase.
The latest statistics were released on Jan 23 as part of JTC’s quarterly market report for 4Q2024 and full calendar year of 2024. The performance of the industrial market last year is a sharp decline compared to the stellar performance in 2023, when price rose by 8.9% y-o-y and rents recorded a yearly increase of 5.1%.
The last quarter of 2024 saw a moderate increase of 2.0% q-o-q in the industrial price index, while the rental index inched up by 0.5% q-o-q. This marks the 17th consecutive quarter of rental increase in the local industrial property market.
Meanwhile, island wide industrial space occupancy in 4Q2024 remained unchanged from the previous quarter, holding constant at 89.0%.
Infographic: JTC
Chua Yang Liang, head of research and consultancy, Southeast Asia, at JLL notes that the latest price and rental statistics of the Singapore industrial property market is not surprising. He points out that JTC’s rental index has been slipping since the end of 2023, on a quarterly and yearly basis. “This suggests that the deceleration is no longer transitionary but structurally embodied in the market,” he says.
While the 4Q2024 rental index is marginally higher compared to the 0.3% q-o-q growth in 3Q2024, Chua opines that this stemmed from businesses positioning themselves in anticipation of the trade rebalancing on the back of the new US government’s tariff plans, he says. He adds that industrial demand in 4Q2024 was led by mostly firms in the semiconductor, computer peripherals, and data storage industries.
Graph: JTC
In terms of transactions, the largest strata sale of a multi-user factory in 4Q2024 was the sale of 1 Genting Lane by Mapletree Logistics Trust for $12.3 million, or a land rate of $339 psf.
A warehouse building at 2 Tuas South Link was also sold to Frasers Logistics & Commercial Trust for $140.3 million last Oct. That month also saw CapitaLand-Ascendas REIT divest an industrial property at 21 Jalan Buroh for $112.8 million.
Market data compiled by Huttons Asia indicate that 353 multi-user factor and warehouse properties changed hands in 4Q2024, this is 23.4% less than the transaction volume in the previous quarter. “More than 80% of the sales was less than $1.5 million, an attractive quantum for investors,” says Lee Sze Teck, senior director of data analytics at Huttons Asia.
Meanwhile, Brenda Ong, executive director of logistics and industrial at Cushman & Wakefield, observes that among all the industrial property segments the multi-user factory segment registered the strongest rental growth of 3.8% y-o-y in 2024, as demand was driven by new and better-located industrial spaces that entered the market last year.
Resilient demand from third-party logistics players, buoyed by tight available supply, helped to propel rental growth in the warehouse segment to a yearly growth of 3.5%. On the other hand, single-user factory rents rose by 3.2% y-o-y, while business park rents climbed 1.9% y-o-y.
“Many industrialists remain cost cautious amidst still-high interest rates and rising operating costs in Singapore. Tenants are resisting further rent hikes after a period of substantial growth, which has tempered overall rent increases,” says Ong.
Looking ahead, she expects most industrialists will streamline and consolidate their operations in Singapore. In response, some landlords, especially thought holding on to older industrial facilities, have slightly lowered their rental expectations although asking rents remains “significantly higher” compared to pre-pandemic levels, she says.
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