The latest report from Savills Singapore reveals a 4.5% year-on-year decline in total industrial leasing volume in the third quarter of 2025, with 3,061 tenancies recorded. This figure aligns closely with the quarterly average of 3,065 deals over the past three years. The decline is attributed to cautious sentiment and slower leasing activity, particularly in the factory and warehouse segments.
The single-factory segment experienced a significant 17.5% drop in demand, whilst the multiple-user factory and warehouse segments saw marginal decreases of 4.0% and 1.6% respectively. Despite these declines, vacancy rates for single- and multiple-user factories remained stable at 10.9% and 9.0%. The warehouse vacancy rate improved slightly, dropping by 0.8 percentage points to 10.4%, largely due to the completion of Maersk’s World Gateway 2, which was fully pre-committed.
Rental trends varied across the sector. Prime warehouse and logistics properties saw a 4.3% quarterly increase in rents, reaching S$1.82 per square foot. In contrast, multiple-user factory rents showed minimal growth, with JTC’s rental index rising by just 0.4% and Savills’ prime multiple-user factory rents decreasing by 0.3% to S$2.25 per square foot.
Strata industrial sales remained steady with 406 transactions, slightly below the quarterly average of 444 deals. Investor sentiment is cautious due to tariff uncertainties, leading to a wait-and-see approach.
Tang Boon Kiat from Savills highlighted the resilience of the prime logistics segment amidst global economic uncertainty. Alan Cheong, also from Savills, noted that demand for modern, high-spec industrial spaces is expected to remain strong, with limited new supply keeping rents and vacancy rates stable.
