by tender
Colliers’ February research report suggests that industrial property prices and rents in Singapore will likely see a moderation this year due to an increase in supply and weaker demand. The firm predicts that both rental and price growth will range between 0% to 2% in 2025, compared to the 3.5% growth seen for both categories in the previous year.
According to Colliers, JTC’s 4Q2024 data reflects a market that is showing signs of slowing down. The JTC All Industrial rental index has seen 17 consecutive quarters of growth, with a 0.5% increase in the fourth quarter of 2024 bringing the total growth for the year to 3.5%. However, this is a substantial decline from the 8.9% growth recorded in 2023. Similarly, the price index grew by 0.5% in 4Q2024, a drop from the 1.2% growth in the previous quarter. This marks a considerable decrease from the 5.1% increase seen in 2024.
Colliers states that the supply of industrial space is expected to increase this year, with more than double the supply in the previous year. However, the firm predicts a tapering off from 2026 onwards. This increase in supply has resulted in an imbalance between supply and demand, with segments of the market seeing slower precommitments for upcoming supply or lower occupancy rates for completed projects. The higher supply, combined with cautiousness among occupiers due to high interest rates and operating expenses, is expected to continue to dampen rental growth.
Moreover, the uncertainty brought about by heightened trade protectionism in global markets may also impact business confidence and investment decisions. On the other hand, Colliers believes that demand for industrial properties will remain supported by the semiconductor, logistics, and advanced manufacturing sectors. The firm also predicts a gradual increase in industrial leasing activities as policies become clearer and market sentiments improve, driven by the ongoing upturn in the chip cycle.
In light of the projected moderation in rents and the increase in supply, Colliers suggests that this could be a good year for tenants, with more options available in the market. The firm also notes that modern and well-equipped industrial developments could entice businesses to relocate from older manufacturing spaces to newer projects. Nicolas Menville, executive director and head of Singapore-based industrial clients for Colliers, says that tenants should take advantage of this opportunity. Interested parties can check out the latest listings for industrial real estate properties and past transactions for rentals and sales to compare prices and trends between commercial and industrial properties.