Strata industrial sales in Singapore have plummeted to a five-year low, with only 351 transactions recorded in the first quarter (Q1) of 2025, according to Savills Research. The decline is attributed to investor caution due to reconfiguring supply chains and increasing business costs, which have led to postponed expansion plans.
Despite the sluggish sales, the JTC multiple-user factory price index rose by 1.9% quarter-on-quarter (QoQ) in Q1. Savills noted that 30- and 60-year leasehold property prices also saw growth, increasing by 3.3% and 1.2% QoQ, respectively. This trend suggests a preference for assets with manageable financial commitments during uncertain economic times. Conversely, freehold property prices fell by 0.7% QoQ.
In the rental market, factory and warehouse segments maintained stable leasing momentum, with a 1.3% year-on-year (YoY) increase in total leasing volume. However, businesses are adopting a cautious approach, delaying leasing decisions and reassessing space needs. Warehouse logistics emerged as the most active segment, with a 6.1% increase in tenancies from the previous year.
Looking ahead, lease renewals are expected to dominate industrial space demand, as landlords offer incentives to retain tenants. Multiple-user factory rents are projected to rise by up to 3% this year, whilst warehouse and business park rents are likely to remain flat due to older developments offsetting higher rents from new facilities.
Ashley Swan, executive director of Commercial & Industrial at Savills Singapore, remarked, “The Singapore industrial market remained fairly resilient in the face of continued economic uncertainty.” Alan Cheong, Executive Director of Research & Consultancy, added, “The imposition of tariffs by the US has raised economic uncertainties, affecting corporate decision-making and slowing transaction velocity.”
The cautious sentiment is expected to persist, impacting business expansion plans and industrial space demand throughout the year.
“`
