Singapore industrial property prices up 4.2% y-o-y in third quarter; JTC notes 'good pipeline supply' of new space

The industrial property market in Singapore showed continued resilience with sustained growth in both prices and rents in 3Q2026, alongside a “good pipeline supply” of new space coming up, JTC said in its latest quarterly market report.

In the third quarter, the price index for all industrial space islandwide continued its upward momentum and increased at a slightly quicker pace of 1.0% q-o-q and 4.2% y-o-y amid steady demand and low interest rates.

This is a tad faster than the previous quarter’s price growth of 0.6% q-o-q and 3.8% q-o-q.

Specifically, multiple-user factory spaces saw prices gain 1.1% q-o-q and 5.3% y-o-y, surpassing that of single-user factories, which logged increases of 0.8% q-o-q and 1.5% y-o-y.

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Meanwhile, sale transaction volumes of all industrial properties were up by 8.1% y-o-y in the third quarter as compared to the year-ago period, going by caveats lodged.

Price index and number of transactions:

Tridiana Ong, head of occupier strategy and solutions at real estate consultancy Knight Frank Singapore, noted that total investment sales value climbed from an estimated $1.4 billion to about $2.0 billion, driven by a few large-ticket deals alongside sales from newly launched strata industrial developments.

In particular, although factories with remaining lease tenures of 30 years and below only saw a marginal increase in the number of transactions, their total sales value almost tripled from $360.7 million in the second quarter to $972.2 million.

“The increasing ticket sizes of some of these shorter-tenure factory assets, relative to the broader industrial market, underscored investor interest in industrial assets, particularly where value enhancement opportunities and competitive pricing can help offset leasehold constraints,” Ong said.

Another consultancy JLL foresees the JTC All Industrial Price Index to grow by about 3–4% for the full year.

This comes as “capital continues to seek shelter in safe havens like Singapore, driving further marginal yield compression”, said Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia.

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Moderate rise in industrial rents, with warehouses leading the increase

In the leasing market, the rental index for all industrial space edged up by 0.5% q-o-q and 2.1% y-o-y — mostly in line with inflation.

Rental index and number of transactions:

This stable rental growth trend, mirroring that of the previous quarter, is supported by global demand for semiconductors on the back of continual investment into AI, according to Chua from JLL.

“Asia Pacific economies including Southeast Asia countries like Singapore and Malaysia are firmly plugged into this growth driver,” he added.

Among the market segments, warehouse rents led the increase, moving up by 1% q-o-q, double the 0.5% growth back in the prior quarter.

During the latest quarter, the only major warehouse completion was Zap Building at 3 Woodlands Industrial Park E7, according to Tricia Song, CBRE head of research, Singapore and Southeast Asia. She added that the occupancy rate for the warehouse segment inched up by 0.3 percentage point to 89.7%.

Meanwhile, rents of single-user factory space rose 0.7% q-o-q, similar to the pace in the second quarter. Amid several project completions, occupancy rate for the segment slipped by 0.2 percentage point to 89.1%.

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A major single-user factory completion in 3Q2026 was Equinix’s SG6, a nine-storey data centre at 21 Jalan Tukang, CBRE highlighted. SG6 was awarded with 20 megawatts of power in 2023 under Singapore’s pilot Data Centre – Call for Application (DC-CFA) initiative to promote the development of sustainable data centres.

Another major completion in this segment was VisionPower Semiconductor Manufacturing Company’s (VSMC) facility at 2 Tampines Industrial Avenue 1 (its final phase of temporary occupation permit). VSMC is a joint venture between Taiwan's Vanguard International Semiconductor Corp and Dutch chipmaker NXP Semiconductors.

Over in the multi-user factory segment, rents inched up by 0.3% q-o-q in the third quarter of this year, moderating from the 0.6% seen in the quarter prior.

Occupancies of multi-user factories declined by 0.2 percentage point to 90.3%.

Song noted that the only major completion in the multi-user factory segment during the latest quarter was Tampines Connection at 2 Tampines North Drive 4, a 10-storey strata-titled building with 239 production units and two industrial canteens.

The quarterly increase in the number of leasing transactions for multi-user factories and warehouses was relatively measured.

That suggests that much of the demand stemmed from lease renewals and ongoing space requirements rather than expansionary moves, said Knight Frank’s Ong.

For business parks, rents kept steady even as the overall occupancy rate fell from 77.9% in the second quarter to 77.2% in the third quarter.

The JTC rental index for business parks stayed fairly stable with a 0.1% q-o-q uptick, after it had eased by 0.1% q-o-q in the previous quarter.

Business-park leasing activity grew 31.3% compared to the same quarter last year, rising from 80 contracts to 105.

“With office rents in the CBD remaining significantly higher and prime office supply constrained, business parks could offer possible space solutions, even though CBD locations remain favoured,” said Ong from Knight Frank.

Occupancies slip as users vacate older factories

The occupancy rate for all industrial space in Singapore eased slightly by 0.2 percentage point q-o-q in the third quarter to 88.9%.

JTC attributed the decrease to users vacating from older single-user and multi-user factories that have been earmarked for future redevelopment, as well as slower demand for suburban business parks.

On the other hand, the warehouse segment saw an increase of 0.3 percentage point in occupancy.

Changes in available stock, occupied stock and occupancy rate:

Chua of JLL pointed out that ongoing geopolitical tensions are weighing on occupier sentiment, with cost-cutting and space optimisation starting to impact overall occupancy levels.

That said, the underlying industrial demand remains firm. Singapore’s Purchasing Managers’ Index (PMI) increased slightly to 51.7 in September, from 51.5 in August, marking the 14th straight month of expansion above the 50-point threshold.

Companies that are rapidly expanding in pioneering industries “will increasingly be under pressure to consider other viable options like business parks or light industrial space as a cost-effective alternative to traditional CBD office locations”, said Ong from Knight Frank.

“This gradual broadening of occupier demand across locations and asset classes should enhance the market's overall resilience and support healthy leasing activity,” she continued.

Upcoming supply: single-user factories and warehouses

There remains a "good pipeline supply" of new industrial space, JTC noted on Oct 22.

Based on planning approvals as at end-September 2026, about 0.3 million sq m (about 3.23 million sq ft) of new industrial space is expected to be completed in the final quarter of this year.

Single-user factories account for 56.1% of 4Q2026 supply, followed by warehouses at 43.7% and multi-user factories at 0.2%.

In the prime logistics segment, future supply is set to moderate “significantly” in 2026 compared to last year, according to CBRE’s Song. Cogent’s Jurong Island Logistics Hub (JILH) Phase II will be the only such major completion expected by 4Q2026.

Song expects prime logistics rents to grow at a measured pace into 2027, given that landlords are prioritising occupancy over rental uplifts as occupiers focus on cost management amid inflationary pressures.

Between 2027 and 2030, an average annual supply of 1.2 million sq m of industrial space is expected to be completed. That is higher than the average of about 1 million sq m of new completions over the past three years, JTC said.

No business-park project is in the pipeline for the next few years. Song added: “More landlords are also exploring asset enhancement initiatives for business parks with dated specifications, which is likely to tighten supply further.”

In Knight Frank’s view, the industrial sector’s long-term prospects are positive, amid Singapore’s stable pro-business operating environment. This is even as growth is narrowing towards AI, advanced manufacturing and technology-driven industries.

Despite Singapore’s largely leasehold industrial landscape, investor and owner-occupier interest remains firm.

“Capital continues to be directed towards industrial assets, with buyers increasingly prioritising properties that benefit from resilient occupier demand, dependable cash flows and opportunities to enhance value, rather than focusing solely on tenure,” Ong said.

Chua of JLL expects the uncertainty as well as elevated energy and freight costs from tensions in the Middle East to prompt businesses to adopt leaner operational models and delay expansion plans until there is greater clarity.

Nonetheless, JLL anticipates firm demand for high-specification premises, supported by order backlogs in the semiconductor sector, although near-term rental growth may be constrained by cost pressures and global disruptions.