The performance of industrial macro indicators was a mixed bag in 2020 with positive blips observed throughout the year, led particularly by the electronics and biomedical sectors. Notably, SIPMM’S PMI posted a strong showing towards the latter half of the year, remaining in expansion territory for six consecutive months from Jul to Dec 2020.

Moving into 2021, the outlook for Singapore’s manufacturing sector looks positive, with both the electronics and biomedical sectors poised to see sustained output growth. The electronics sector is set to be boosted by the technology and 5G markets, with Singapore rolling out its 5G plan in Jan 2021; whereas the biomedical sector is likely to continue being supported by pharmaceuticals, especially with vaccine rollouts in place. Meanwhile, PMI is likely to sustain its expansion, albeit at a slow momentum as the COVID-19 virus continues to spread globally.

On the other hand, while the 6.8% y-o-y growth in NODX in Dec 2020 paints a positive picture, existing global risks could point at a bumpy ride ahead. Global trade shows signs of promise on the back of significant global vaccine developments; however, uncertainties surrounding the regional supply chain remain as the pandemic continues to play out globally.



Thus far, Singapore has been a beneficiary of the manufacturing shift to Southeast Asia following the Sino-U.S. trade war, as well as the “China Plus One” strategy. Opportunities remain as industry players continue to enhance their capabilities here, given the openness of Singapore’s economy, high connectivity and political neutrality, with some global pharmaceutical firms reportedly looking into establishing vaccine manufacturing facilities in Singapore.


Improvements in key industrial indicators provide a favourable macro backdrop for occupier and investment markets to recover.


The overall warehouse supply pipeline remains subdued, continuing to taper from previous years. As at Q3 2020, the new warehouse supply per annum from 2020 to 2023 stands at 2.03 mil sq. ft., a comparatively lower figure than 4.42 mil sq. ft. from 2010 to 2019. The limited supply is further compounded by the COVID-19 pandemic.

Construction delays have already resulted in a portion of 2020’s pipeline being pushed to 2021. Nonetheless, as developers and contractors continue to adjust in accordance with the Building and Construction Authority’s COVID-Safe Restart Criteria, CBRE Research expects some of the supply to begin materialising towards mid-2021, barring any unforeseen circumstances.



The subdued upcoming warehouse supply will lend support to occupancy. Meanwhile, occupiers may be more inclined to plan for relocations or expansions ahead of time so as to secure their preferred options.


A handful of warehouse developments are slated for completion in 2021, including Cogent Jurong Island Logistics Hub (0.94 mil sq. ft.), 2 Pioneer Sector 1 (0.57 mil sq. ft.) and F&N Foods Pte Ltd’s single-user industrial development at Tuas Link 3 (0.31 mil sq. ft.). Targeted for completion in H2 2021, Soilbuild REIT’s 2 Pioneer Sector 1 is a redevelopment of the existing facility into a ramp-up warehouse with an open yard space. Meanwhile, F&N’s facility is set to be the firm’s innovation centre and will consolidate most of its local operations in a single premise.

While prime logistics vacancy remained compressed throughout the latter half of 2020 as most buildings approached full occupancy, it may see a slight increase in 2021, with anecdotal evidence suggesting that pockets of prime logistics spaces are slated to be released towards mid-2021.


Logistics has remained a resilient asset class amid the pandemic, with rents returning to pre-COVID-19 levels at the end of 2020. This was contributed mainly by government stockpiling; as well as third-party, e-commerce and food logistics players who saw a surge in consumer demand during the “circuit breaker” period.

With social distancing measures still in place, CBRE Research expects the third-party logistics and e-commerce segments to continue driving demand in 2021, while government stockpiling will continue to ease off.

The warehouse market remains two-tier, with stronger resilience expected for the prime logistics submarket. While anecdotal evidence has suggested that prime logistics vacancy may see a slight increase in H2 2021, prime logistics spaces will continue to see stable demand and command higher rents due to their higher specifications.

Taking these factors into account, CBRE Research forecasts a 0.7% y-o-y growth for prime logistics rents in 2021. Further, cold chain logistics is poised to be an additional demand driver, as food logistics continues to be a key logistics demand driver. In addition, there may be opportunities for specialised cold chain logistics as the government positions Singapore as a vaccine distribution hub.

Stable rental growth is expected thereafter, at a similar pace of growth in both 2022 and 2023. This is in line with the recovery of Singapore’s economy, which is poised to be a gradual one.



Logistics will remain resilient in the year ahead, retaining its attractiveness to investors across all asset classes, especially for buildings with higher specifications. Landlords are advised to review their portfolios and rejuvenate older properties for futureproofing.