Singapore
Commentary on JTC's Q1 2025 Statistics
April 24, 2025
Associated Contact
Melvin Lin
Head of Marketing & Communications, Singapore
By Tricia Song (宋明蔚), Head of Research, Southeast Asia, CBRE
The JTC All Industrial Rental Index rose by 0.5% q-o-q in Q1 2025, with momentum on par with the previous increase of 0.5% q-o-q in Q4 2024. This was the 18th consecutive quarter of rental increase. Since the trough in Q3 2020, the JTC All Industrial Rental Index has also increased by 23.7%.
Among the various market segments, rents for the business park segment increased the most by 1.2% q-o-q, an acceleration from the 0.2% q-o-q in Q4 2024. The uplift in rental rates in Q1 2025 could be attributed to the completion of Geneo, CapitaLand Group’s redevelopment of 1 Science Park Drive. Newer buildings with better connectivity and higher specifications have continued to drive up rentals in the last few years.
• That said, the business park segment continues to be a two-tiered market. While performance of properties in prime locations is resilient, some older ones continue to face pressure with high vacancies. According to JTC’s data, vacancy rates increased from 22.1% in Q4 2024 to 24.1% in Q1 2025. Properties with high vacancies continued to offer flexible lease terms and incentives.
Rents for the single-user factory segment rose by 0.8% q-o-q, an acceleration from the 0.1% q-o-q increase in Q4 2024. Among the various market segments, occupancy rate for single-user factories increased the most by 0.6 ppt to 88.6% in Q1 2025. During the quarter, major completions were CIBA Vision Asian Manufacturing & Logistics’ factory at Tuas South Avenue 3 (A&A works) and SH M&E Engineering’s factory at Jalan Papan, an Industrial Government Land Sales (IGLS) site. Despite the new completions, the segment saw negative net supply of approximately one million square feet, the highest since Q1 2018 due to demolitions which removed stock from the market.
The JTC All Industrial Rental Index rose by 0.5% q-o-q in Q1 2025, with momentum on par with the previous increase of 0.5% q-o-q in Q4 2024. This was the 18th consecutive quarter of rental increase. Since the trough in Q3 2020, the JTC All Industrial Rental Index has also increased by 23.7%.
Among the various market segments, rents for the business park segment increased the most by 1.2% q-o-q, an acceleration from the 0.2% q-o-q in Q4 2024. The uplift in rental rates in Q1 2025 could be attributed to the completion of Geneo, CapitaLand Group’s redevelopment of 1 Science Park Drive. Newer buildings with better connectivity and higher specifications have continued to drive up rentals in the last few years.
• That said, the business park segment continues to be a two-tiered market. While performance of properties in prime locations is resilient, some older ones continue to face pressure with high vacancies. According to JTC’s data, vacancy rates increased from 22.1% in Q4 2024 to 24.1% in Q1 2025. Properties with high vacancies continued to offer flexible lease terms and incentives.
Rents for the single-user factory segment rose by 0.8% q-o-q, an acceleration from the 0.1% q-o-q increase in Q4 2024. Among the various market segments, occupancy rate for single-user factories increased the most by 0.6 ppt to 88.6% in Q1 2025. During the quarter, major completions were CIBA Vision Asian Manufacturing & Logistics’ factory at Tuas South Avenue 3 (A&A works) and SH M&E Engineering’s factory at Jalan Papan, an Industrial Government Land Sales (IGLS) site. Despite the new completions, the segment saw negative net supply of approximately one million square feet, the highest since Q1 2018 due to demolitions which removed stock from the market.
Rents for the warehouse segment grew by 0.6% q-o-q, moderating from the 0.9% q-o-q increase in Q4 2024. There were two major warehouse completions in Q1 2025 – the first was Boustead Trustees’ 36 Tuas Road, a five-storey prime logistics facility featuring temperature-controlled storage. The second was DB Schenker’s Red Lion 2 facility located at 33 Greenwich Drive, which is expected to support the semiconductor and healthcare sectors. With demand lagging supply, occupancy rate for the warehouse segment decreased by 1.0 ppt to 90.5% in Q1 2025.
Lastly, rents for the multi-user factory segment increased by 0.3% q-o-q, slightly easing from the 0.4% q-o-q increase in Q4 2024. With no major multi-user factory project completions during the quarter, the occupancy rate increased by 0.3 ppt to 91.3% in Q1 2025 amid healthy leasing demand by occupiers.
Prices grew by 1.5% q-o-q in Q1 2025, with momentum moderating from the 2.0% q-o-q increase in the All-Industrial Price Index in the previous quarter. This marks the fourth quarter of prices increasing at a faster rate than rents. Prices for the multi-user factory segment increased by 1.9% q-o-q, on par with last quarter’s growth. The single-user factory segment recorded a 0.4% q-o-q growth, easing from a 2.3% q-o-q increase in Q4 2024. While the U.S. Federal Reserve has paused interest rate cuts in early 2025, Singapore’s short to medium term interest rates appear to have come down at a faster rate in the first few months of 2025. The lower financing costs may have continued to support positive investor sentiment in industrial assets, despite heightened economic uncertainties.
As at end-Mar 2025, about 7.7 mil sq. ft. of new industrial space (or around 1.3% of total stock) is scheduled for completion over the next three quarters of 2025, with the warehouse segment accounting for 32% of Q2-Q4 2025 supply. The remainder of the pipeline comprises single-user factories, multi-user factories and business parks at 29%, 29% and 10% respectively.
Lastly, rents for the multi-user factory segment increased by 0.3% q-o-q, slightly easing from the 0.4% q-o-q increase in Q4 2024. With no major multi-user factory project completions during the quarter, the occupancy rate increased by 0.3 ppt to 91.3% in Q1 2025 amid healthy leasing demand by occupiers.
Prices grew by 1.5% q-o-q in Q1 2025, with momentum moderating from the 2.0% q-o-q increase in the All-Industrial Price Index in the previous quarter. This marks the fourth quarter of prices increasing at a faster rate than rents. Prices for the multi-user factory segment increased by 1.9% q-o-q, on par with last quarter’s growth. The single-user factory segment recorded a 0.4% q-o-q growth, easing from a 2.3% q-o-q increase in Q4 2024. While the U.S. Federal Reserve has paused interest rate cuts in early 2025, Singapore’s short to medium term interest rates appear to have come down at a faster rate in the first few months of 2025. The lower financing costs may have continued to support positive investor sentiment in industrial assets, despite heightened economic uncertainties.
As at end-Mar 2025, about 7.7 mil sq. ft. of new industrial space (or around 1.3% of total stock) is scheduled for completion over the next three quarters of 2025, with the warehouse segment accounting for 32% of Q2-Q4 2025 supply. The remainder of the pipeline comprises single-user factories, multi-user factories and business parks at 29%, 29% and 10% respectively.
Outlook
• According to advance estimates from the Ministry of Trade and Industry (MTI), Singapore’s economy contracted in Q1 2025 as GDP declined by 0.8% q-o-q on a seasonally adjusted basis, a reversal from the 0.5% expansion in Q4 2024. The manufacturing sector grew by 5.0% y-o-y in Q1 2025, moderating from the 7.4% expansion in Q4 2024.
• Amid global economic uncertainties, MTI announced that Singapore’s GDP growth forecast for 2025 has been downgraded from “1.0 – 3.0%” to “0.0 – 2.0%”. While businesses may adopt a ‘wait-and-see’ attitude given increased caution, CBRE Research observed that occupier enquiries are still resilient. Given Singapore’s strategic location, skilled workforce and stable business environment, most tenants are still opting to renew their leases. With expansionary demand cooling down, some landlords have adapted quickly by being accommodative and offering incentives to entice tenants to relocate.
• With more prime logistics assets scheduled for completion over the next three quarters of 2025, CBRE Research expects near term pressure for prime logistics rents. That said, newer facilities or those more centrally-located are expected to be more resilient compared to older properties or facilities with less superior specifications.
While it is still too early to forecast the impact of the Johor-Singapore Special Economic Zone (JS-SEZ), the initiative to combine the strengths of Johor and Singapore should be positive for Singapore in attracting global investments in the medium to longer term.
• Amid global economic uncertainties, MTI announced that Singapore’s GDP growth forecast for 2025 has been downgraded from “1.0 – 3.0%” to “0.0 – 2.0%”. While businesses may adopt a ‘wait-and-see’ attitude given increased caution, CBRE Research observed that occupier enquiries are still resilient. Given Singapore’s strategic location, skilled workforce and stable business environment, most tenants are still opting to renew their leases. With expansionary demand cooling down, some landlords have adapted quickly by being accommodative and offering incentives to entice tenants to relocate.
• With more prime logistics assets scheduled for completion over the next three quarters of 2025, CBRE Research expects near term pressure for prime logistics rents. That said, newer facilities or those more centrally-located are expected to be more resilient compared to older properties or facilities with less superior specifications.
While it is still too early to forecast the impact of the Johor-Singapore Special Economic Zone (JS-SEZ), the initiative to combine the strengths of Johor and Singapore should be positive for Singapore in attracting global investments in the medium to longer term.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2024 revenue). The company has more than 140,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves clients through four business segments: Advisory (leasing, sales, debt origination, mortgage servicing, valuations); Building Operations & Experience (facilities management, property management, flex space & experience, digital infrastructure services); Project Management (program management, project management, cost consulting); Real Estate Investments (investment management, development). Please visit our website at www.cbre.com.