Singapore’s industrial sector experienced a downturn in leasing activity in 2024, with the total leasing volume dropping by 3.7% year-on-year (YoY) to a three-year low of 12,039 deals, according to Savills Singapore’s latest Industrial Briefing for the fourth quarter of 2024. This decline comes amidst uncertainties in global trade negotiations influenced by the new US administration’s transactional approach.
The report highlights a mixed performance across different segments of the industrial property market. Monthly rents for prime multiple-user factories increased by 2.8% YoY to S$2.28 per square foot in Q4 2024, a slower pace compared to the previous year. Meanwhile, prime warehouse and logistics property rents rose by 4.9% YoY to S$1.73 per square foot, down from a 7.4% increase in Q4 2023.
In the sales market, there was a notable rise in demand for strata-titled assets, with total strata sales volume climbing by 8.5% YoY to 1,730 transactions in 2024. Prices for freehold and 60-year leasehold properties grew by 3.5% and 5.4% YoY respectively, whilst 30-year leasehold properties saw a faster increase of 4.1% YoY.
Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore, noted, “With the new US administration adopting a transactional approach to trade negotiations, uncertainties mount for the industrial sector which may take some time to reach a new equilibrium.”
Looking ahead, rents for multiple-user factories are expected to continue rising by up to 3.0% this year, whilst logistics space rents are likely to remain stable due to substantial pre-commitments on new builds. However, older business parks may face elevated vacancy levels and weaker rents in 2025.
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