Global demand for semiconductors, driven by investments in artificial intelligence (AI), is bolstering Singapore’s industrial property market, according to JLL’s commentary on the JTC Quarterly Market Report for Q3 2026. Dr Chua Yang Liang, Head of Research and Consultancy for Southeast Asia at JLL, noted that Singapore and Malaysia are key players in this growth, maintaining a stable rental growth trend similar to the previous quarter.
The JTC report highlighted a 0.5% quarter-on-quarter increase in the All Industrial Rental Index and a 1.0% rise in the All Industrial Price Index. However, geopolitical tensions are affecting occupier sentiment, leading to cost-cutting and space optimisation, which have slightly reduced occupancy levels by 0.2 percentage points in both multi-user and single-user factory segments.
Singapore’s Purchasing Managers’ Index (PMI) rose to 51.7 in September, marking 14 consecutive months of expansion, whilst the electronics PMI reached 52.9, its highest since January 2018. This aligns with strong global AI-related demand, supporting industrial space demand in Singapore.
The Economic Development Board’s Business Expectations Survey for Q3 2026 showed a net weighted balance of +12% for improved manufacturing conditions, led by the precision engineering cluster at +55%. The electronics cluster also showed positive expectations, benefiting from AI-related applications.
Despite potential risks from geopolitical tensions and investor scrutiny over AI infrastructure spending, JLL anticipates continued demand for high-specification premises. The All Industrial Rental Index is expected to grow by 2-3% for the full year 2026, with the All Industrial Price Index projected to increase by 3-4%, driven by capital seeking safe havens like Singapore.
