Industrial rents up in Q3 as factories outperform

Rents in business parks and science parks held steady.

Industrial rents saw moderate growth in the third quarter of 2026 as conventional factories outperformed, according to Cushman & Wakefield (C&W).

Conventional factory rents edged up by 0.6% quarter-on-quarter (QoQ) as vacancy rates stabilised, C&W MarketBeat report said.

Amidst declining vacancies, hi-tech spaces also recorded a 0.3% QoQ rental growth, supported by demand from semiconductor and artificial intelligence companies.

Prime logistics and warehouse rents grew 0.2% QoQ and 0.4% QoQ, respectively, with vacancy rates rising slightly to 4.9% and 5.5%, respectively.

C&W said vacancy rates for prime logistics space may tighten due to constrained supply, elevated development costs, and resilient demand from third-party logistics players.

Only 460,000 square feet (sf) of prime logistics space is expected to come onstream in 2027, and both Sunview Logistics and Container Hub are estimated to be 70% pre-committed, C&W said. About 633,133 sf will come on stream in 2028.

"Over the near term, constrained prime logistics supply, elevated development costs and resilient demand is expected to support rental growth and vacancy rates are expected to fall," C&W said in the report.

Rents in business parks and science parks held steady. City fringe business park vacancy rates declined to 6.6%, the lowest level since Q4 2023.

C&W said that city fringe business park vacancy rates may face pressure from emerging secondary space over the coming quarters.

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