Singapore\u2019s industrial rental market showed\u00a0 increasingly divergent trends in the third quarter of 2026, as Savills Singapore’s prime rental baskets recorded declines in both the warehouse and multiple-user\u00a0 factory segments despite continued gains in JTC\u2019s broader rental indices. Meanwhile, prime business park and high-specification industrial rents continued\u00a0 to rise, reflecting occupiers’ preference for newer, better-equipped facilities.\u00a0<\/p>\n
Singapore\u2019s factory and warehouse leasing market recorded a slight uptick in \u00a0Q3\/2026,<\/strong> with transaction volume rising by 4.3% year-on-year (YoY) to 3,192 \u00a0deals. While the leasing market for single-user factory continued to slow in Q3, \u00a0leasing momentum picked up for multiple-user factory and warehouse segments \u00a0as stronger electronics and AI-related manufacturing and export activity supported \u00a0demand from some occupiers.\u00a0<\/p>\n While JTC’s multiple-user factory and warehouse rental indices rose by 0.3% and\u00a0 1.0% quarter-on-quarter (QoQ) respectively,<\/strong> Savills’ prime rental baskets pointed\u00a0 to mounting pressure at the upper end of the market. Prime warehouse and\u00a0 logistics monthly rents recorded their first decline after five consecutive quarters of\u00a0 growth, falling by 2.7% QoQ. Similarly, prime multiple-user factory rents declined\u00a0 by a further 1.3% QoQ, their lowest level in three years.\u00a0<\/p>\n The divergence reflects differences in the market segments tracked by JTC’s\u00a0 broader rental indices and Savills’ selected prime property baskets,<\/strong> with the latter\u00a0 indicating growing rental pressure among prime assets as occupiers become\u00a0 increasingly cost-conscious.\u00a0<\/p>\n Ashley Swan, Executive Director, Commercial & Industrial, Savills Singapore, told RETalk Asia\u00a0<\/strong>“Cost pressures remain at the forefront of occupiers\u2019 decision-making and\u00a0 have led to them being increasingly selective with their real estate decisions as\u00a0they re-align these considerations with operational needs. This more measured\u00a0 approach coupled with increased demand from the technology as well as advanced\u00a0 manufacturing sectors is reflected in the stronger performance of the high-specs\u00a0 industrial and newer business park segments where newer, more efficient and\u00a0 better equipped facilities generally offer increased value. In contrast, we expect\u00a0 older facilities to continue to face challenges going into the new year with limited\u00a0 supply helping to soften any decline.”\u00a0<\/p>\n In contrast, <\/strong>Savills’ business park rental basket returned to growth after a short lived decline in the preceding quarter. Standard business park monthly rents rose\u00a0 by 0.5% QoQ, while prime monthly rents increased more strongly by 2.6% QoQ. The outperformance of prime space reflects occupiers’ continued flight to quality,\u00a0 with demand favouring newer workplaces offering superior specifications,\u00a0 sustainability features and tenant amenities.\u00a0<\/p>\n This preference was similarly evident in the high-specification industrial segment,\u00a0 <\/strong>where rents rose by 1.4% QoQ. Demand from technology, advanced\u00a0 manufacturing and business services occupiers continued to favour newer, better equipped facilities.\u00a0<\/p>\n However, <\/strong>performance remained uneven across the business park market.\u00a0 Vacancy in the Central Planning Region fell to 10.8%, its lowest level since Geneo’s\u00a0 completion in early 2025. In contrast, weaker demand in older business park\u00a0 clusters in the East and West Planning Regions contributed to a 0.7 percentage\u00a0 point increase in the islandwide vacancy rate to 22.8%.\u00a0<\/p>\n Looking ahead,<\/strong> new industrial supply is expected to remain limited in 2026, with\u00a0 706,000 sq ft of multiple-user factory space and 2.0 million sq ft of warehouse\u00a0 space in the pipeline, well below their respective four-year annual averages of 3.3\u00a0 million sq ft and 3.0 million sq ft. This should cushion the impact of softer demand,\u00a0 with Savills forecasting JTC’s multiple-user factory rental index to remain flat in\u00a0 2026 and its warehouse rental index to rise by 1%. (See Table 1)\u00a0<\/p>\n Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore, told RETalk Asia “<\/strong>Despite Singapore’s stronger economic performance, industrial rental\u00a0 growth has not kept pace with the broader economy as businesses continue to face\u00a0operating cost pressures. Limited new supply should help stabilise the market, but\u00a0 rental performance is likely to diverge increasingly by asset quality. Newer business\u00a0 parks and high-specification industrial developments should continue to outperform,\u00a0 while older properties may face greater pressure to upgrade or reposition.”\u00a0<\/p>\n Singapore\u2019s industrial rental market showed\u00a0 increasingly divergent trends in the third quarter of 2026, as Savills Singapore’s prime rental baskets recorded declines in both the…<\/p>\n","protected":false},"author":1,"featured_media":98389,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[2611],"tags":[],"class_list":["post-98388","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buzz-headlines","wpcat-2611-id"],"_links":{"self":[{"href":"https:\/\/sgbuzz.com\/index.php?rest_route=\/wp\/v2\/posts\/98388","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sgbuzz.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sgbuzz.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sgbuzz.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sgbuzz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=98388"}],"version-history":[{"count":0,"href":"https:\/\/sgbuzz.com\/index.php?rest_route=\/wp\/v2\/posts\/98388\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sgbuzz.com\/index.php?rest_route=\/wp\/v2\/media\/98389"}],"wp:attachment":[{"href":"https:\/\/sgbuzz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=98388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sgbuzz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=98388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sgbuzz.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=98388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.retalkasia.com\/sites\/default\/files\/img_2204_1.jpeg\")
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