Industrial leasing activity rises 2.1% YoY in Q3

There were 3,205 tenancies recorded during the period.

Industrial leasing activity increased by 2.1% year-on-year (YoY) to 3,205 tenancies in Q3 2024, marking a two-year high, according to Savills.

The growth was attributed to higher leasing demand for warehouse spaces, which saw a 10.1% increase in tenancies signed compared to a year ago.

Leasing demand for warehouses and logistics, particularly from third-party logistics providers (3PLs), weakened as these firms reduced their footprint in response to cost pressures.

In terms of vacancies, the rate for multiple-user factories eased by 0.3 percentage points (ppt) quarter-on-quarter (QoQ) to 8.4%, the lowest level since 1996. Savills attributed this to landlords revising their rental expectations or offering incentives to fill spaces in less prime locations.

Meanwhile, warehouse vacancy increased to 8.9% in Q3, up from 8.7% in Q2.

Rental growth for multiple-user factories and warehouses moderated to 0.6% and 0.1% QoQ, respectively. Single-user factory rents, however, ended their four-year growth streak with a 0.3% QoQ decline.

On the flip side, prime multiple-user factory rents rose by 1.3% QoQ to S$2.29 per sq ft in Q3, driven by strong rental growth in developments with good accessibility and amenities.

Meanwhile, Savills’ warehouse and logistics properties faced rental pressure due to softer demand, resulting in a muted rental growth of 0.2% QoQ to S$1.68 per sq ft in Q3.