Singapore’s industrial rental market experienced contrasting trends in the third quarter of 2026, according to Savills Singapore. Prime warehouse and multiple-user factory rents declined, despite JTC’s broader rental indices showing gains. This reflects occupiers’ growing preference for newer, better-equipped facilities, leading to increased demand for prime business parks and high-specification industrial assets.
Leasing activity in factories and warehouses fell by 29% year-on-year to 2,174 deals, marking the lowest quarterly level since 2017. This decline was driven by external uncertainties and cautious business sentiment, prompting occupiers to delay expansion plans and become more selective in their space requirements. Savills reported that prime warehouse rents fell by 2.7% quarter-on-quarter, whilst prime multiple-user factory rents decreased by 1.3%, reaching their lowest levels in three years.
Ashley Swan, Executive Director of Commercial & Industrial at Savills Singapore, noted, “Cost pressures remain in the forefront of occupiers’ decision-making and has led to them being increasingly selective with their real estate decisions.”
In contrast, business park rents showed resilience, with standard business park monthly rents rising by 0.5% and prime rents increasing by 2.6% quarter-on-quarter. High-specification industrial rents also rose by 1.4%, driven by demand from technology and advanced manufacturing sectors.
Looking forward, limited new industrial supply is expected to stabilise the market, with Savills forecasting JTC’s multiple-user factory rental index to remain flat in 2026 and its warehouse rental index to rise by 1%. Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore, highlighted that newer business parks and high-specification industrial developments are likely to continue outperforming, whilst older properties may face pressure to upgrade.
