Higher Supply And Weaker Demand Put Downward Pressure Industrial Property Rents Colliers
Singapore’s industrial property market is expected to see a more moderate year in 2025, with both rental and price growth projected to be between 0% to 2%, according to a February report from Colliers. This follows a strong 2024 where both rental and price growth reached 3.5%, but this is a significant decline from the growth seen in 2023.
Colliers states that JTC’s 4Q2024 data shows a market that is “losing steam”. The JTC All Industrial rental index grew by 0.5% quarter-on-quarter, marking a 17th consecutive quarter of growth. This brought the total growth for the year to 3.5%, a decline from the 8.9% growth in 2023. The price index also grew by 0.5% in 4Q2024, down from the 1.2% growth in the previous quarter. This resulted in a 2.1% increase in industrial property prices for the whole of 2024, less than half of the 5.1% recorded in 2023.
According to Colliers, the supply of industrial space is expected to increase this year, with more than 2.5 times the supply of last year coming onto the market before tapering off from 2026 onwards. This has led to an imbalance between supply and demand, with certain segments of the market seeing upcoming supply with slower pre-commitments or completed projects with lower occupancy.
.
Nestled just a brief car ride away from Toa Payoh lies Balestier Plaza, a charming shopping destination that offers a relaxed atmosphere and a diverse selection of products. From electronics to textiles, this plaza boasts a variety of shops catering to a range of needs. It is also a haven for foodies, with multiple dining options available, making it an ideal spot for a peaceful afternoon away from the hustle and bustle of the city centre. The plaza’s blend of old and new stores perfectly captures the unique essence of the Balestier area, renowned for its rich heritage sites and local delicacies. As an added bonus, visitors can also check out The Orie Condo, a stunning residential development adjacent to the plaza.
The higher supply, combined with cautiousness among occupiers due to continued high interest rates and rising operating expenses, is expected to keep rental growth in check.
However, Colliers also notes that demand for industrial space is expected to be supported by the semiconductor, logistics, and advanced manufacturing sectors. Additionally, as policies become clearer and market sentiments improve, leasing activities are expected to ramp up gradually.
In the meantime, the projected moderation in rents and increase in supply means that tenants will have more options to choose from this year, making it a good time for them. Colliers also states that new industrial developments with more modern specifications may entice businesses to move from older, aging manufacturing spaces to newer projects. Nicolas Menville, executive director and head of Singapore-based industrial clients for Colliers, suggests that this could be a good time for tenants to keep an eye out for listings and past transactions in the industrial property market.
Industrial Real Estate properties can be found on Ask Buddy, which provides listings for past rental and sale transactions, as well as price trends for the industrial property market.