Colliers has released its Industrial Q4 2024 report, revealing a slowdown in the growth of Singapore’s industrial rents and prices. The report highlights that whilst the JTC All Industrial rental index saw its 17th consecutive quarter of growth, the annual growth rate for 2024 was 3.5%, a decline from 8.9% in 2023. This moderation is attributed to industrial occupiers exercising cost caution due to high interest rates and escalating operating expenses.
The report indicates that overall rental growth was positive across all segments, driven by the multiple-user and warehouse sectors. However, occupancy rates declined in the multiple-user factory and business park segments. The price index also showed a slowdown, with a 2.1% annual growth for 2024, down from 5.1% in 2023.
Looking ahead, Colliers projects that both rental and price growth will continue to moderate in 2025, with expected growth between 0% to 2%. This is due to weaker demand and a significant increase in industrial space supply, which is anticipated to be more than 2.5 times that of 2024.
Nicolas Menville, Executive Director and Head of Singapore-based Industrial Clients at Colliers, noted, “New industrial developments, equipped with more modern specifications, could encourage more businesses to relocate from older, ageing manufacturing spaces to newer projects.”
Despite the challenges, there is optimism for the sector. The ongoing upturn in the chip cycle is expected to boost investment spending, particularly in the semiconductors, logistics, and advanced manufacturing sectors. This could lead to a gradual increase in leasing activities as market sentiments improve.
