Singapore’s industrial property sector continues its impressive streak of rental resilience, extending its growth for the twentieth consecutive quarter into the third quarter of 2025. While the segment remains a critical source of stability for the nation’s real estate market, the broader picture shows a distinct moderation in the speed of price increases, largely due to ongoing global economic uncertainty influencing how transactions play out.
The latest official statistics from JTC Corporation highlight this mixed environment. Specifically, the overall rental index for industrial space managed a marginal quarter-on-quarter (QoQ) bump of $0.5\%$. This modest upward trend was significantly buoyed by the warehouse segment, where rents saw a more pronounced $0.9\%$ QoQ rise, clearly signalling the persistent high demand for modern facilities that support sophisticated logistics and supply chain needs.
Reflecting this consistent demand, the overall occupancy rate across the island edged up slightly to $89.1\%$, representing a $0.3$ percentage point increase from the preceding quarter and confirming steady space absorption. However, the growth in the industrial property price index tells a more cautious story, climbing by a subdued $0.6\%$ QoQ—the slowest recorded quarterly increase since the third quarter of 2024.
Market experts attribute this slowdown to an increasingly wary outlook among both occupiers and investors who are grappling with various issues, including trade policy headwinds and rising operational expenses. This prevailing market sentiment is fueling a discernible “flight to quality.” Demand remains consistently strong for high-specification properties, business parks, and specialized infrastructure designed for advanced manufacturing and data centers. Conversely, older, less-sophisticated spaces are experiencing notably weaker leasing activity.
Furthermore, many corporate occupiers are now actively seeking more flexible tenancy arrangements, favoring shorter lease durations and incorporating options for early termination. This strategic shift allows them to postpone major capital expenditure decisions and gives them the necessary time to reassess their long-term space requirements. Consequently, this intense focus on efficiency and cost management is likely to keep the overall level of leasing activity somewhat restrained in the immediate future.
Despite the tempered price growth, investment interest in the industrial segment like Food Factory hasn’t waned. Analysts note that the continued easing of global interest rates, coupled with the attractive yields available from niche assets such as prime logistics hubs and cutting-edge data centers, is keeping investor appetite healthy. Looking ahead to early 2026, market indicators are expected to hold firm, supported by a restricted immediate pipeline of new high-spec factory and warehouse supply. JTC confirmed that only about $210,000$ square metres of new industrial space is slated for completion in the final quarter of 2025, which will primarily consist of single-user and multiple-user factory premises.
