Business park vacancy rate hits 14-year high in Q4 2024

The vacancy rate for the period reached 22.1%.

Island wide business park vacancy rate rose to 22.1% year-on-year (YoY) in Q4 2024, the highest since 2010, Savills reported.

Savills attributed this increase to the sluggish demand for business park space and  the completion of the first phase of Punggol Digital District in H2 2024

In the same period, the vacancy rate in District 22, Postal Sector 60 was 35.6%, whilst District 5, Postal Sector 11 saw a 15.4% increase.

Meanwhile, overall leasing demand weakened across the board in 2024, with the single-user factory segment recording the largest decline of 17.2% YoY.

The industrial leasing momentum also slowed due to reduced demand for single-user factory (-25% YoY) and warehouse (-16% YoY) spaces.

Total leasing volume also fell by 4.5% YoY in Q4 2024, whilst total leasing demand for FY2024 weakened by 3.7% YoY, hitting a three-year low.

In addition, Savills noted that the monthly rental growth for prime multiple-user factories moderated to 2.8% YoY in Q4 2024 from 10.5% YoY a year ago.

“While we have seen a rental increase for newer, better spec-ed business park space, we expect that segment of the industrial market to continue to face challenges as vacancies rise throughout. In general, we expect all industrial segments to face challenges in 2025 but remain largely resilient,” Ashley Swan, executive director for Commercial & Industrial at Savills Singapore said.