Commentary on JTC's Q2 2025 Statistics

By Tricia Song (宋明蔚), Head of Research, Southeast Asia, CBRE

The JTC All Industrial Rental Index rose by 0.7% q-o-q in Q2 2025, with momentum accelerating from the previous increase of 0.5% q-o-q in Q1 2025. This marks the 19th consecutive quarter of rental increase. Since the trough in Q3 2020, the JTC All Industrial Rental Index has also increased by 24.6%.
 
Rents in the business park segment recorded the strongest growth among industrial property types, rising by 1.2% q-o-q in Q2 2025, matching the pace seen in Q1 2025. This marks the third consecutive quarter of rental growth, underscoring sustained demand in this segment.

• The increase was largely driven by newer developments in more centralised business park locations. According to JTC data, median rents in City Fringe areas such as one-north and Science Park I saw rental increases, while Rest of Island locations continued to face downward pressure. This divergence highlights the two-tiered nature of the business park market. While well-located, high-specification properties remain resilient, older assets are grappling with higher vacancy rates and weaker demand.
• CBRE Research observed that islandwide leasing activity was buoyed by relocations and new market entrants, with strong interest from banking and finance occupiers, as well as non-traditional tenants such as educational institutions. This sustained demand contributed to a decline in the overall vacancy rate, from 24.1% in Q1 2025 to 23.3% in Q2 2025.

Rents for the multi-user factory segment increased by 0.9% q-o-q, accelerating from the 0.3% q-o-q increase in the previous quarter. The increase in rents can be attributed to flight to quality as occupiers seek facilities with desirable specifications. CBRE Research also observed more relocation activity in Q2 2025, spurred by landlord initiatives such as fitted units, which partly contributed to the uplift in rents. During the quarter, the only multi-user factory project completion was JTC Space @ Ang Mo Kio (1.26 mil sq. ft.). With demand lagging supply, occupancy rate decreased by 0.3 ppt to 91.0% in Q2 2025.
 
Rents for the single-user factory segment rose by 0.4% q-o-q, moderating from the 0.8% q-o-q increase in Q1 2025. Occupancy rate for single-user factories increased by 0.4 ppt to 89.0% in Q2 2025. During the quarter, major completions were Kok Tong Transport and Engineering Works’ factory at 6 Terusan Edge, and VDL Enabling Technologies Group’s factory at 259 Jalan Ahmad Ibrahim (remaining phase of TOP). Despite several new completions in Q2 2025, the segment continued to see negative net supply of 0.13 mil sq. ft., as demolitions removed stock from the market.
 
Lastly, rents for the warehouse segment increased by 0.4% q-o-q, easing from the 0.6% q-o-q growth in the previous quarter. Occupancy rate for the warehouse segment decreased by 1.7 ppt to 88.8% in Q2 2025 as it marked the highest level of warehouse completions since Q2 2017. Major warehouse completions during the quarter were Maersk’s World Gateway 2 facility at 15 Benoi Sector (1.08 mil sq. ft.), Mapletree Joo Koon Logistics Hub at 5A Joo Koon Circle (0.89 mil sq. ft.), and DSV Pearl at 14 Tukang Innovation Drive (0.73 mil sq. ft.).
 
According to JTC’s All-Industrial Price Index, prices increased by 1.4% q-o-q in Q2 2025, with momentum slightly moderating from the 1.5% q-o-q growth in Q1 2025. This marks the fifth quarter of prices increasing at a faster rate than rents. Prices for the multi-user factory segment increased by 1.7% q-o-q, easing from last quarter’s 1.9% q-o-q increase. For the single-user factory segment, prices grew by 0.4% q-o-q, on par with last quarter’s 0.4% q-o-q increase. While the U.S. Federal Reserve has paused interest rate cuts thus far in 2025, Singapore’s short to medium term interest rates have come down at a faster rate. The lower financing costs may have helped to support positive investor sentiment in industrial and logistics assets, despite lingering concerns over U.S. trade policies and economic uncertainty. 
 
As at end-Jun 2025, 2.98 mil sq. ft. of new industrial space (or around 0.5% of total stock) is scheduled for completion over the next two quarters of 2025, with the multiple-user factory segment accounting for 48.4% of H2 2025 supply. The remainder of the pipeline comprises single-user factories and warehouses at 27.0% and 24.6% respectively. 
 
There will be no new business park project completions in H2 2025. Over the next three years, the only major project in the pipeline is 27 IBP (0.21 mil sq. ft.), scheduled for completion in 2026. Supply may tighten further as more landlords undertake asset enhancement initiatives to upgrade aging properties.
 

Outlook

According to advance estimates from the Ministry of Trade and Industry (MTI), Singapore’s economy expanded in Q2 2025 as GDP grew by 1.4% q-o-q on a seasonally adjusted basis, a turnaround from the 0.5% contraction in the first three months of the year. The manufacturing sector expanded by 5.5% y-o-y in Q2 2025, accelerating from the 4.4% expansion in Q1 2025. Growth in manufacturing output was observed across all clusters, except for the chemicals and general manufacturing clusters.
 
Despite ongoing trade uncertainties, CBRE Research saw an uptick in leasing volume in Q2 2025 across the logistics, hi-tech and business park segments. This can be attributed to active landlord leasing strategies. For instance, landlord incentives which involved fitting out units or capex support helped tenants to reduce setup time and costs. Looking ahead to H2 2025, business sentiment is expected to remain cautious. While this may cause delays in decision making, occupiers gravitate to Singapore’s business-friendly environment, attractive labour pool and world-class infrastructure, among other factors.

With warehouse project completions peaking in Q2 2025, prime logistics rents saw a 0.5% q-o-q dip, albeit easing from the 1.6% q-o-q drop in Q1 2025. Rent softness was most evident in older assets with lower ceiling heights as landlords adjusted expectations to fill vacancies. That said, with prime logistics supply expected to moderate in H2 2025 and 2026, the logistics market may gradually shift from a tenant-favourable market towards a landlord-favourable environment by year-end.