Prime logistics tightens to 4.3% as new supply stalls

Prime logistics rents are forecast to rise 2% to 3% in 2026.

Singapore's prime logistics market tightened further in the second quarter, with vacancy sliding to 4.3% — the lowest across all industrial segments — as the absence of new completions kept supply constrained.

Vacancy rates across industrial segments are stark, with warehouse space at 10.6%, high-tech factory at 14.6%, and suburban business parks at 27.5%, according to a Cushman & Wakefield report.

Required rents for new warehouse developments now sit meaningfully above current market rents, a gap the report says will constrain new supply and reinforce landlord pricing power.

Prime logistics rents grew just 0.9% in 2025 but are forecast to rise 2% to 3% in 2026, the strongest projected growth amongst all industrial segments tracked.

Warehouse, high-tech factory, and business park segments are each forecast at a narrower 1% to 3% for the year.

Moreover, manufacturing sentiment for April to September 2026 turned net positive at 17%, up from 11% in the first half of the year, led by precision engineering (+51) and electronics (+42).

The report also flags rising electronics demand tied to the global artificial intelligence-driven semiconductor boom, projected to post its strongest growth in over two decades, as a further tailwind for high-specification industrial space.

Looking ahead, only about 450,000 square feet of prime logistics space is expected to come online in 2027.

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