Commentary on JTC's Q3 2025 Statistics

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

Rents

The JTC All Industrial Rental Index rose by 0.5% q-o-q in Q3 2025, indicating a moderation in momentum from last quarter’s 0.7% q-o-q increase. This marks the 20th consecutive quarter of rental increase. Since the trough in Q3 2020, the JTC All Industrial Rental Index has increased by 25.3%.

Rents for the warehouse segment increased by 0.9% q-o-q, accelerating from the 0.4% q-o-q growth in Q2 2025. With net absorption at its strongest since Q2 2023, and warehouse completions moderating compared to last quarter, occupancy rate increased by 0.8 ppt to 89.6% in Q3 2025. Two major completions to note during the quarter were CapitaLand Ascendas REIT’s redevelopment of 5 Toh Guan Road East (0.55 mil sq. ft.) into a modern six-storey ramp-up facility, and Toll Logistics’ conversion of parking spaces to additional warehouse space at its existing ramp-up facility at 60 Pioneer Road (0.13 mil sq. ft.).

• CBRE Research also observed strong take-up for prime logistics space during the quarter, led by major third-party logistics (3PL) firms. As a result, occupancy rate for CBRE Research’s basket of prime logistics properties rose from 92.1% in Q2 2025 to 93.6% in Q3 2025.

Rents for the single-user factory segment rose by 0.7% q-o-q, accelerating from last quarter’s 0.4% q-o-q increase. Occupancy rate for single-user factories increased by 0.1 ppt to 89.1% in Q3 2025. During the quarter, the only notable completion was Novartis’ A&A works for its existing pharmaceutical manufacturing facility at 8 Tuas Bay Lane (0.09 mil sq. ft.). 

Rents for the multi-user factory segment rose by 0.4% q-o-q in Q3 2025, moderating from last quarter’s 0.9% q-o-q growth. During the quarter, the only completion was CT FoodNEX at 2A Mandai Estate (0.20 mil sq. ft.), a 10-storey freehold food factory comprising 109 production units and one canteen. Occupancy rate for multi-user factories remained unchanged at 89.1% in Q3 2025.

• Hi-tech spaces continue to be driven by flight to quality. Relocation activity by occupiers remains active, as landlords selectively offer incentives. Occupiers with a smaller footprint are enticed by fitted units as it reduces initial start-up costs.

Lastly, overall rents in the business park segment recorded a 0.2% q-o-q dip. While it was a reversal from last quarter’s strong growth of 1.2% q-o-q, rents have increased by 2.3% y-o-y, indicating resilient demand for this segment.

• While newer facilities in City Fringe locations see strong demand which brought up average rents, selected assets in Rest of Island locations experienced downward pressure due to aging specifications and flight-to-quality trends. This divergence in performance reflects the two-tiered nature of the business park segment.
• Nevertheless, healthy take-up drove a decline in the overall vacancy rate, from 23.3% in Q2 2025 to 23.0% in Q3 2025.

 

Prices

According to JTC’s All-Industrial Price Index, prices rose by 0.6% q-o-q in Q3 2025, with momentum moderating from last quarter’s 1.4% q-o-q growth. Although the price increase was the lowest over the past four quarters, it still marked the sixth consecutive quarter of prices increasing at a faster rate than rents amid resilient demand for industrial assets. Prices for the single-user factory segment increased by 2.1% q-o-q, accelerating from the 0.4% q-o-q increase in the prior quarter. As for the multi-user factory segment, prices inched up marginally by 0.1% q-o-q, moderating from the 1.7% q-o-q increase in Q2 2025. 

The financing landscape has helped support investor sentiment in 2025, as ample liquidity has pushed down Singapore’s short to medium term interest rates at a faster rate compared to U.S. benchmark rates. With interest rates on a downward trajectory, investors are increasingly looking to deploy capital into defensive asset classes. Industrial real estate, especially those with leasehold tenures, are attractive to both institutional and private investors with its stable returns and widening yield spreads.  

As at end-Sep 2025, 2.26 mil sq. ft. of new industrial space (or around 0.4% of total stock) is scheduled for completion within the last quarter of 2025. The single-user and multiple-user factory segments will account for 61.0% and 35.6% of Q4 2025 supply respectively. Lastly, the warehouse segment will account for 3.4% of the remaining supply pipeline. 

There will be no new business park project completions in Q4 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. As more landlords undertake asset enhancement initiatives to improve the specifications of aging facilities, supply is expected to tighten.

Outlook

Singapore’s economy demonstrated continued expansion in Q3 2025 as GDP grew by 1.3% q-o-q on a seasonally adjusted basis, according to advance estimates from the Ministry of Trade and Industry (MTI). This marks a slight moderation from the 1.5% growth in Q2 2025. The manufacturing sector’s y-o-y growth was flat in the third quarter of 2025, slowing from the 5.0% y-o-y expansion in the previous quarter. However, on a seasonally adjusted basis, the manufacturing sector grew 6.1% q-o-q, a reversal from the 0.7% q-o-q contraction in the second quarter.

Despite growth in other manufacturing clusters from July to August on a y-o-y basis, overall output was dragged down by declines in the biomedical manufacturing and general manufacturing clusters. That said, global investment in AI infrastructure is fuelling strong demand for memory chips and servers. Singapore is expected to be a beneficiary from such tailwinds given its significant role in the semiconductor industry.

During the quarter, CBRE Research observed an acceleration in leasing activity compared to Q2 2025. While global trade policies remain a concern, Singapore’s stability and safe-haven status continue to attract occupiers, indicating resilience in a climate of uncertainty. Hi-tech and factory spaces saw strong interest from semiconductor and technology firms in Q3 2025. 

As for the prime logistics segment, demand surged as 3PL firms continue to absorb choice spaces. This led to prime logistics rents increasing by 1.1% q-o-q in Q3 2025, a reversal from the 0.5% q-o-q decrease in the previous quarter. With future prime logistics supply moderating, modern ramp-up facilities are expected to benefit from further rent increases. For occupiers that wish to alleviate cost pressures, CBRE Research has observed some interest in the Johor-Singapore Special Economic Zone (JS-SEZ), as selected trades are open to establishing a satellite warehouse in Johor.