Resilient industrial sector expected throughout 2025

Leasing activity even surged in Q2.

The industrial sector is seen to remain resilient in the following months, with a manageable pipeline and new patterns, according to Colliers.

In the second quarter (Q2) of 2025, the JTC All Industrial rental index marked its 19th consecutive quarterly increase, with rents rising 0.7% in Q2 from 0.5% in the first quarter (Q1). The price index also grew by 1.4% in Q2, slightly slower than the 1.5% growth in Q1.

“Rental growth was positive across all segments, led by the multiple-user factory and business park segments. Overall industrial occupancy declined marginally to 88.8%, dragged down by the warehouse segment, which saw occupancy declining by 1.7%,” its analysis read.

Savills Singapore expects renewals and strategic relocations to remain a dominant theme throughout 2025, as firms hedge against trade volatility and maintain operational agility.

For private industrial properties, Savills said prime multiple-user factory rents declined 1.4% in Q2 as cost-conscious firms consolidated space or renewed leases at more competitive terms.

In terms of prime warehouse and logistics rents, these surged 4.3%, underpinned by sustained demand from e-commerce, manufacturing, and third-party logistics operators amidst limited quality supply. High-spec industrial rents also rose 2.1%, driven by demand in selected nodes with modern infrastructure.

Alan Cheong, executive director of Research and Consultancy at Savills Singapore, said that the previous three months showed many occupiers remain focused on optimising their real estate portfolio despite delaying large-scale commitments.

“We’re seeing active lease restructures, right-sizing, and relocations into more efficient facilities – especially where new fit-outs or capex can be avoided,” Cheong said.

Colliers projects the industrial space supply to reach 19.5 million square feet by 2027.

“With careful calibration of supply and a strong reputation as a trusted regional hub, Singapore is well-positioned to capture long-term demand from high-value occupiers seeking operational stability and supply chain efficiency,” said Nicolas Menville, executive director and head of Singapore-based Industrial Clients at Colliers.

Meanwhile, “the potential introduction of new tariffs on key exports like semiconductors and pharmaceuticals could exert pressure on these sectors. Whilst leasing remains active, sentiment is cautious, and rental growth is forecast to moderate in the coming quarters,” Colliers said.