Industry News

Singapore’s industrial market has marked its 22nd consecutive quarter of rental growth, with the JTC All Industrial Rental Index rising by 0.4% in the first quarter of 2026. This growth, however, shows a slight deceleration from the 0.5% increase observed in the previous quarter. Tricia Song, CBRE Head of Research for Singapore and Southeast Asia, noted that whilst occupier demand remains robust, tenants are becoming more selective, focusing on location and asset specifications.

Among the various segments, single-user factory rents saw the most significant increase, rising by 1.0% quarter-on-quarter. This was bolstered by major completions such as Trans Auto Logistics’ facility and Sumitomo Seika Singapore’s facility. Meanwhile, multi-user factory rents increased by 0.5%, with notable completions including Smart Food @ Mandai and Azalea Kitchens.

The business park segment experienced a 0.3% rise in rents, despite a slight increase in vacancy rates to 23.3%. This is attributed to challenges faced by some facilities in retaining tenants due to less competitive specifications. Conversely, newer assets in City Fringe locations continue to attract tenants, sustaining rental growth.

Warehouse rents rose by 0.2%, with significant completions like Jurong Logistics Terminal 5 and a cold-chain food logistics facility at 8 Jalan Besut. However, occupancy rates for warehouses decreased slightly to 89.4%.

Looking ahead, the Johor-Singapore Special Economic Zone is expected to enhance investment confidence, whilst Singapore’s strong AI-related manufacturing sector is likely to support continued demand. CBRE anticipates steady rental growth in the prime logistics segment, with occupancy rates potentially reaching 97% by the end of 2026.

CapitaLand Investment Limited (CLI), a prominent global real asset manager, has been awarded a S$2.4b investment mandate by Income Insurance Limited to manage its direct real estate portfolio. This portfolio includes retail, commercial, and industrial assets, both directly held and through joint ventures. CLI aims to enhance the performance of these assets in Singapore and explore new investment opportunities across the Asia Pacific region.

This mandate further strengthens CLI’s position in Singapore, with over S$12.1b in transactions recorded in 2025 and 2026. The company continues to focus on capital recycling across various asset classes to maximise returns for investors. Recent transactions include the joint acquisition of Ascent, a premium business space, for S$490 million, and the divestment of Asia Square Tower 2 for S$2.5b, followed by the acquisition of Paragon for S$3.9b.

Andrew Lim, Group Chief Operating Officer and CEO of Real Estate, Private Funds at CLI, expressed enthusiasm about the partnership, stating, “We are delighted and honoured to welcome Income Insurance as a valued capital partner. CLI’s level of investment activity reflects our capital partners’ confidence in us as a trusted investment manager.”

David Chua, Chief Investment Officer at Income Insurance, highlighted the strategic importance of real estate in their investment portfolio, noting, “Tapping CLI’s portfolio and asset management expertise will enable Income Insurance to further enhance the value of our real estate portfolio.”

With Singapore’s reputation as a stable global wealth hub, CLI is well-positioned to benefit from ongoing capital inflows, managing approximately 200 properties across diverse asset classes in the country.

Singapore’s headline Consumer Price Index (CPI) increased by 0.5% month-on-month in March, reflecting the direct impact of surging energy prices, according to a report by UOB Global Economics and Markets Research. The rise in energy costs, particularly Brent crude oil prices, which surged over 40% in March, significantly influenced petrol prices, leading to a 16.4% month-on-month increase. This contributed to a year-on-year headline CPI rise of 1.8%, aligning with Bloomberg’s consensus but slightly below UOB’s projection of 1.9%.

The core CPI, which excludes private transport and accommodation costs, saw a more modest increase of 0.1% month-on-month. Key components such as food and healthcare showed little to no sequential growth. However, land transport services rose by 2.3% month-on-month, driven by a 6.7% increase in point-to-point transport costs as private hire companies temporarily raised fares due to rising fuel prices.

The Monetary Authority of Singapore (MAS) maintained its 2026 inflation forecast range at 1.5–2.5%, citing potential upside risks due to imported cost pressures. The outlook remains cautious, with domestic consumer spending potentially affected by economic uncertainties and supply chain disruptions.

UOB’s report highlights that whilst first-round effects of the energy supply shock are evident, it is premature to assess second-round effects. The bank expects core inflation to strengthen from June 2026, peaking at 2.5% in August-September, before moderating towards 2.0% by the end of the year. MAS is anticipated to tighten monetary policy further in October, with potential earlier action if inflation expectations accelerate.

Frasers Centrepoint Asset Management Ltd., the manager of Frasers Centrepoint Trust (FCT), has announced a 1.4% year-on-year increase in Distribution per Unit (DPU) for the first half of the financial year 2026, reaching 6.136 cents. This growth is attributed to the robust performance of its suburban retail portfolio, with committed occupancy at 99.8% and healthy rental reversions.

The trust’s gross revenue surged by 20.3% to $221.9m, driven by contributions from the Northpoint City South Wing acquisition and higher rents across its malls. Net property income also rose by 20.2% to $160.8m. The distribution to unitholders increased by 13.6% to $125m.

Chief Executive Officer Richard Ng highlighted the progress in Asset Enhancement Initiatives (AEIs) at Hougang Mall and NEX, which aim to improve asset yields and support sustainable income growth. Over 88% of the AEI space at Hougang Mall is committed, with completion expected by September 2026. AEI works at NEX will commence in May 2026.

FCT’s financial position remains strong, with an aggregate leverage of 40% and a well-staggered debt maturity profile. Approximately two-thirds of its borrowings are hedged to fixed interest rates. The trust’s proactive cost management includes fully hedged electricity costs for FY26.

Looking forward, FCT plans to continue its growth strategy through strategic acquisitions and optimising portfolio performance. Despite macroeconomic uncertainties, the trust remains confident in the resilience of Singapore’s suburban retail sector, supported by population growth and rising household incomes.

Savills Research has revised its forecast for Singapore’s office rental growth in 2026, increasing it from 2% to a range of 3%–5% year-on-year. This adjustment is attributed to tight supply conditions and sustained occupancy levels. In the first quarter of 2026, average rents for Grade A offices in Singapore’s Central Business District (CBD) rose by 0.6% quarter-on-quarter to S$10.02 per square foot, marking the highest level since the pre-pandemic period of 2019.

The demand for premium office space remains robust, with Grade AAA office rents increasing by 0.4% quarter-on-quarter to S$13.28 per square foot in Q1 2026. However, the growth momentum in this segment is moderating as rents approach cyclical highs. The vacancy rate for CBD Grade A offices decreased by 0.1 percentage points to 6.6%, the lowest since Q3 2024.

Ashley Swan, Executive Director of Commercial & Industrial at Savills Singapore, noted the continued leasing activity and tightening supply, particularly in premium grade buildings. Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore, commented that limited new supply and low vacancy levels allow landlords to maintain pricing power, supporting rental growth.

Despite geopolitical uncertainties and rising costs, the structural supply constraints are expected to drive rental performance. The forecasted rental growth reflects these dynamics, with landlords positioned to benefit from the tight market conditions.

CapitaLand Integrated Commercial Trust (CICT) has announced an 8% year-on-year increase in gross revenue for the first quarter of 2026, ending 31 March. This growth is attributed to the full acquisition of CapitaSpring and contributions from Gallileo. The net property income also saw a 7.9% rise, reflecting the trust’s robust financial performance.

CICT’s portfolio demonstrated strong operational metrics, with a committed occupancy rate of 95.2%. Retail occupancy was particularly high at 97.8%, whilst office occupancy stood at 93.7%. The retail sector experienced a 4.4% rent reversion, with tenant sales per square foot increasing by 2.2% year-on-year, supported by seasonal promotions and a rise in tourist arrivals.

In the office sector, CICT recorded a 6.1% rent reversion, with significant leasing interest from industries such as Banking, Insurance & Financial Services, IT & Telecommunications, and Energy & Commodities. The total new and renewed leases for the quarter amounted to 121,300 square feet.

CICT is also set to divest Asia Square Tower 2 at a 9.9% premium to its valuation, with plans to reinvest the proceeds into Paragon, a freehold integrated development, offering a higher net yield of 3.9%. Additionally, a S$160m asset enhancement initiative is planned for Plaza Singapura and The Atrium@Orchard, aimed at upgrading infrastructure and enhancing the retail experience.

The trust maintains a healthy financial position with a low aggregate leverage of 38.5% and a reduced average cost of debt at 2.9%. With 76% of borrowings on fixed interest rates, CICT is well-positioned for future growth. These strategic moves underscore CICT’s commitment to enhancing its portfolio and delivering value to stakeholders.

NEC Contracts has unveiled a new study highlighting the paradox within Singapore’s construction sector: whilst 64% of projects are delivered on time and within budget, 61% of professionals perceive supply chains as adversarial. The research, involving over 1,000 industry professionals globally, underscores the need for improved trust and collaboration in the industry.

The report, titled *Trust, Contracts and Outcomes: A Global Study of Construction Supply Chain Relationships*, reveals that 81% of Singapore respondents believe trust is crucial for project success. However, only 34% have participated in projects using collaborative contracts, despite 75% supporting their broader adoption.

Key issues identified include uncontrolled scope changes, poor estimating, inflationary pressures, and a late payment culture, contributing to business instability and disputes. Effective communication, clear processes, and trust-based relationships are seen as vital for minimising disputes.

Renee Paik, Head of Asia Pacific at NEC Contracts, noted, “There is genuine enthusiasm for collaborative contracting, and in markets like Singapore, we are seeing strong momentum of interest translating to a growing number of pilot projects.”

The study suggests that client organisations play a pivotal role in driving the shift towards collaborative contracting.

Changi Airport has been recognised as Singapore’s strongest brand, according to the latest Singapore 100 2026 report by Brand Finance. The report also highlights DBS’s achievement of maintaining its position as Singapore’s most valuable brand for the 14th consecutive year, with a 7% increase in brand value to US$18.6b.

The report, published by Brand Finance, a leading brand valuation consultancy, reveals that the total value of Singapore’s brands has risen by 7% to US$84.1b, reflecting the country’s economic resilience. Changi Airport achieved a Brand Strength Index (BSI) score of 91.2 out of 100, securing its top position in brand strength.

TeleChoice International emerged as the fastest-growing brand in Singapore, with its brand value soaring by 288%. Meanwhile, Millennium Hotels and Resorts was named the leader in Singapore’s hotel sector. Singapore Airlines was recognised for leading in Environmental, Social, and Governance (ESG) perceptions among Singaporean respondents.

The report underscores the robust performance of Singaporean brands amidst challenging economic conditions. As Singaporean brands continue to strengthen their market positions, the report suggests a positive outlook for the nation’s economic landscape. The full ranking and detailed insights are available on Brand Finance’s website, providing a comprehensive overview of the current brand landscape in Singapore.

Paragon Capital Management has announced the appointment of Emmanuel Lim as Managing Director and Portfolio Manager, enhancing the firm’s investment capabilities in foreign exchange, precious metals, rates, and commodities. Lim, with over 25 years of market experience, is known for his disciplined, macro-driven approach, which is particularly relevant in today’s complex global market conditions.

Lim’s investment strategy is rooted in fundamental macro analysis, allowing him to make opportunistic trades whilst adhering to a robust risk management framework. This appointment comes at a time when structural shifts in monetary policy, evolving inflation dynamics, and geopolitical uncertainties are prevalent. Paragon Capital Management believes that active management in these areas offers significant diversification potential and a unique source of alpha within portfolios.

Paul, a representative from Paragon Capital, stated, “Market regimes are evolving, and the case for active, disciplined management across FX, PM, rates, and commodities has become increasingly compelling. Emmanuel brings deep experience across multiple market cycles, a rigorous macro-driven investment framework, and a strong focus on risk management.”

Lim expressed his enthusiasm, saying, “I’m pleased to join Paragon Capital Management at a time of heightened change across global markets. FX and PM offer significant opportunities for active managers who remain disciplined, selective, and risk-aware.”

Paragon Capital Management, a boutique asset management firm with assets under management exceeding S$1.4b, operates in Singapore and Hong Kong. The firm provides tailored investment strategies to accredited investors, including institutional clients, and offers a diverse suite of funds across public and private markets.

The Housing Development Board (HDB) resale market experienced its first decline since 2019, with prices dropping by 0.1% in the first quarter of 2026. This decrease is attributed to a steady supply of Build-To-Order (BTO) flats over the past four years, some with waiting times of three years or less, and the Sale of Balance Flats (SBF) exercises offering alternatives to resale flats.

Transaction volumes for HDB resale flats reached 6,258 in Q1 2026, marking a 4.6% decrease compared to the same period in 2025. This represents the lowest first-quarter volume since 2021, likely influenced by the concurrent launch of BTO and SBF exercises in February 2026, which drew demand away from the resale market. February’s BTO launch saw 4,692 flats attracting over 13,000 applicants, whilst the SBF exercise garnered more than 15,000 applicants.

Despite the overall decline, some areas remained popular. Punggol, Sengkang, Tampines, Woodlands, and Yishun accounted for 35.5% of total transactions in Q1 2026. However, prices in 10 out of 26 HDB towns contracted, with Clementi experiencing the largest decline at 6.9%.

The number of million-dollar flat transactions increased, with 412 units sold for at least $1m in Q1 2026, a 17.4% rise from the previous quarter. The average price of these flats was $1.151m, slightly lower than the previous quarter’s $1.165m.

Looking ahead, the HDB resale market may face a soft landing in 2026, with around 6,900 BTO flats set to be offered in June. The influx of new flats, particularly in desirable locations like Bedok, Queenstown, and Toa Payoh, may continue to impact the resale market, potentially increasing the number of million-dollar transactions. Resale flat prices are expected to fluctuate between -2% and 2% throughout the year.