Summary
The rise in industrial property prices were driven by the price expansion of multiple-user
factories in the central, northeast and east regions. However, the price growth was not
uniform islandwide.
After decelerating for six quarters, the industrial property rental growth picks up
marginally in the last quarter of 2024 to 0.5% qoq from 0.3% in 3Q 2024. The demand for
warehouse space from the logistics and e-commerce industries contributes to the rental
expansion of storage space.
Two of Singapore’s biggest export markets are China and the US, accounting for 23% of
the domestic exports from Singapore in 2024. If the US administration of Donald Trump
imposing new trade barriers for imports into America, it would not only reduce our exports to
the US, but also our exports to China.
From 2025 to 2027, a steady supply of new industrial space to the tune of 11.5 million to
12.9 million sq ft (square feet) is expected annually. Demand for industrial space must
increase at a steady pace to absorb this upcoming supply. If a global trade war do break out,
the decline in industrial property demand could result in a 4% to 6% decrease in industrial
property rentals in 2025.
Industrial property price growth picks up in 4Q,2024 but the growth is not uniform
Based on the latest industrial real estate figures released by the authorities, the industrial
property prices increased by 2.0% quarter-on-quarter (qoq) and 3.5% year-on-year (yoy).
The appreciation in the real estate capital values were driven by the price expansion of
multiple-user factories in the central, northeast and east regions.
The rise in factory prices were not uniform islandwide. The capital values of multiple-user
factories in the western parts of Singapore declined 1.8% qoq due to weaker demand for
factories zoned as Business 2 (B2) which are used by general industries. A large proportion
of the factories in the west region of Singapore are B2 factories.
Industrial property rental growth
After decelerating for six quarters, the industrial property rental growth picks up marginally in
the last quarter of 2024 to 0.5% qoq from 0.3% in 3Q 2024. The rental growth was led by the
rise in the rentals of warehouses and Business 1 (B1) multiple-user factories, which are used
by the light and clean industries.
The demand for warehouse space from the logistics and e-commerce industries also
contributed to the rental expansion of storage space.
Outlook: Effects of Trump 2.0 on Singapore industrial property demand
Singapore exports most of the manufactured outputs produced locally. Two of our biggest
markets are China and the US, which are the destinations of 12.3% and 10.7% respective of
the domestic exports from Singapore in 2024.
If the US administration of Donald Trump carries out his campaign promises of imposing
new trade barriers on America’s trading partners, it would not only reduce our exports to the
US, but also our exports to China. This is because some of Singapore’s exports to China are
intermediate goods that are part of the global supply chain.
If the Chinese export to the US are adversely affected by the US tariffs, it would also reduce
the Chinese demand for Singapore’s export to China. This in turn, would reduce the demand
for our factory outputs and subsequently, the demand for factory space in Singapore.
In the three years from 2025 to 2027, a steady supply of new industrial space to the tune of
11.5 million to 12.9 million sq ft (square feet) is expected annually. Demand for industrial
space must increase at a steady pace to absorb this upcoming supply. If a global trade war
do break out, the decline in industrial property demand could result in rising vacancy and a
4% to 6% decrease in industrial property rentals in 2025.
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