Higher supply and weaker demand to put downward pressure on industrial property rents: Colliers

Industrial property rates and rents in Singapore are assumed to regulate this year amid a lot higher supply and weaker need, according to a February research study record by Colliers. The company is forecasting both total annual commercial leasing and cost buildup to moderate to in between 0% to 2% in 2025, compared to the 3.5% increase chalked up for both in 2024.

On the other side, Colliers anticipates commercial demand to continue to be supported by the semiconductors, logistics and advanced manufacturing fields. It additionally expects industrial leasing activities to see a progressive ramp-up over time as policies come to be more clear and market positions improve, underpinned by the recurring recovery in the chip cycle.

On top of that, heightened trade protectionism has actually brought uncertainty right into international markets, possibly influencing service confidence and investment choices.

According to Colliers, the supply of industrial spot is expected to grow this year, with over 2.5 times the supply last year coming on stream prior to lessening from 2026 onwards. “This upsurge in supply has actually led to today supply-demand inequality with segments of the market now seeing upcoming supply with slower precommitments or finished projects with reduced occupancy,” the report states.

The consumer price index also expanded 0.5% q-o-q in 4Q2024, easing from the 1.2% growth in the last quarter. Last year, industrial property prices increased 2.1%, less than half of the 5.1% increase reported the year before.

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In the meantime, given the bump in supply and the predicted balance in rental fees, this could be a good year for tenants with more choices concerning market, claims Colliers. “New commercial developments, geared up with even more modern requirements, might urge much more firms to relocate from older, ageing production spaces to newer ventures,” claims Nicolas Menville, executive manager and head of Singapore-based industrial clients for Colliers.

The higher supply, incorporated with raised caution amongst occupiers because of constantly high rate of interest and rising operating budget, is expected to proceed dampening rental increase.

The low-key expectation enters as JTC’s 4Q2024 data indicated a market that is “losing steam”, states Colliers. The JTC All Industrial rental index charted a 17th successive quarter of expansion in 4Q2024, climbing 0.5% q-o-q and bringing complete growth for the year to 3.5%. However, this notes a significant decrease from the 8.9% rental development visited 2023.


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