OCT 2024
Key Figures
Q3 FULL YEAR HISTORICAL AVG
2024 2024F 2019–2023
Industrial Q3 2024: Total net absorption decreased
to 0.6 mil sf during Q3 2024,
On shaky ground
a marked decline from the 2.7 0.6 mil sf 6.41 mil sf 7.48 mil sf
Demand mil sf registered in Q2 2024.
About 1.13 mil sf of industrial
Quarterly and Outlook | Singapore space came on stream this
quarter, the bulk of which 1.13 mil sf 6.19 mil sf 8.84 mil sf
Supply were single-user factories.
QOQ/ YOY CHANGE/ YOY/
INSIGHTS & RECOMMENDATIONS END Q3 2024 END 2024F END 2022
• The JTC All Industrial rental index continued its sixteenth Prime logistics rents remained 1.7% 4.9%
unchanged for Q3 2024.
consecutive quarter of growth in Q3 2024 to reach its highest
Rental growth is likely to taper
level since Q2 1996. The rental index rose by 0.3% q-o-q, due to higher supply and SGD1.74 SGD1.75 SGD1.64
Rent
slowing further from the 1.0% q-o-q registered in the weakening demand.
previous quarter.
• Overall rental growth was driven by the multiple-user and Island-wide vacancy remained 1.0pp 0.4pp
warehouse segments, while slight declines were registered in flat at 11.0% during Q3 2024,
attributed to tepid demand.
the business park and single-user factory segments. Overall Vacancy 11.0% 12.0% 10.6%
industrial occupancy was flat, with occupancy rates declining
in the single-user factory and warehouse segments.
1.4% 4.0%
• The price index grew by 0.5% q-o-q, deaccelerating from the Prime logistics capital values
1.2% growth in the previous quarter to attain its highest level remained flat due to the lack
Capital SGD219 psf SGD220 psf SGD209 psf
of transaction activity.
since 4Q 2015. Values/Yields
• Both rental and price growth are expected to moderate
further in light of weaker demand and higher supply of
Source Colliers. Note: 1 sq m = 10.764 sf. “pp” refers to percentage point.
industrial stock. *Rents, capital values and yields refer to prime logistics assets.
1
All Industrial ALL INDUSTRIAL DEMAND & SUPPLY
The JTC All Industrial rental index continued its sixteenth consecutive quarter of growth in Q3 2024 to reach its 15.0 91.0
Change in stock (mil sf)
highest level since Q2 1996. The rental index rose by 0.3% q-o-q, slowing further from the 1.0% q-o-q registered in
10.0 90.0
Occupancy (%)
the previous quarter.
5.0 89.0
Overall rental growth was driven by the multiple-user and warehouse segments, while slight declines were registered
in the business park and single-user factory segments. Overall industrial occupancy was flat, with occupancy rates 0.0 88.0
declining in the single-user factory and warehouse segments.
-5.0 87.0
The price index grew by 0.5% q-o-q, deaccelerating from the 1.2% growth in the previous quarter to attain its highest 2019 2020 2021 2022 2023 Q1 Q2 Q3
level since 4Q 2015. 2024 2024 2024
Factory PRIVATE FACTORY DEMAND & SUPPLY
8.0 93.0
The rental indices for multiple-user/single-user factory came in at 0.6%/-0.3% q-o-q respectively,
Change in stock (mil sf)
which points to a 5.8%/3.9% y-o-y growth. 6.0
Occupancy (%)
92.0
Demand for both types softened in Q3 2024, thereby slowing rental growth. Despite a spike in the supply of factories in 4.0
2025, most of the upcoming factories are of the single-user type which have already been pre-committed and will not 2.0
91.0
impact the market significantly. 0.0
In the multi-user factory segment, there has been ongoing negotiations with prospective tenants to fill up space, as well -2.0 90.0
as the backfilling of spaces from tenants from the engineering, logistics and biomedical sectors; though in many cases, 2019 2020 2021 2022 2023 Q1 Q2 Q3
2024 2024 2024
landlords have thrown in some incentives to secure them. Continuing the trend from the previous quarters, the pressure
from subdued demand coupled with an increase in supply is expected to further temper the growth in rentals and prices PRIVATE WAREHOUSE DEMAND & SUPPLY
in the factory space. 4.0 94.0
Change in stock (mil sf)
3.0 92.0
Warehouse
Occupancy (%)
2.0 90.0
The warehouse segment registered a marginal increase in rent (0.1% q-o-q) despite a decline (-0.2% q-o-q) in occupancy.
1.0 88.0
Demand for warehouses have weakened this quarter, due to softening demand from third-party logistics providers (3PLs)
0.0 86.0
and companies aiming for more efficient use of space amid financial pressures. This is the result of cautious spending and
-1.0 84.0
outlook from businesses and consumers, leading to weaker goods turnover and e-commerce sales. In the prime logistics
2019 2020 2021 2022 2023 Q1 Q2 Q3
space, rental growth is also slowing due to tenant resistance to higher rents. 2024 2024 2024
BUSINESS PARK DEMAND & SUPPLY
Business Parks
1.5 88.0
Business Park rents have registered a decline of 0.2% q-o-q in Q3 2024, a continuation of the slowdown from the -0.1%
Change in stock (mil sf)
recorded in the previous quarter. On the other hand, occupancy has risen by 50 bps to 78.8% this quarter. The increase in 1.0 84.0
Occupancy (%)
occupancy could be attributed to the take-up at newer or newly completed business parks.
0.5 80.0
Demand in the business park sector remains muted, with mostly renewals for smaller spaces observed. Notably,
vacancies have also increased in some prime business parks. In a slow market and with increasing competition, some 0.0 76.0
landlords have also adjusted their rental expectations and are throwing in incentives such as fit out solutions or rent-free
-0.5 72.0
periods. As such, business park tenants are now in much better bargaining positions with more options. 2019 2020 2021 2022 2023 Q1 Q2 Q3
2024 2024 2024
At the newer business parks, demand has been underpinned by tenants from the biomedical and government sectors, as
Net Supply Net Absorption Occupancy Rate
well as those looking to upgrade from the older business parks or downsize from the CBD. Going forward, the business
park sector may continue to face challenges, due to softening demand and increased supply in 2025. Source: Colliers, JTC 2
The risk of higher vacancy rates, particularly in the COLLIERS INDUSTRIAL RENTS
Nicolas Menville
Executive Director business park sector, is likely to sustain downward
Q3 2024 % Change % Change
Head of Singapore based pressure on rents.
(SGD) QOQ YOY
Industrial Clients, Singapore
Nevertheless, Singapore's manufacturing sector High-specs 3.42 -0.6% 2.1%
continued to exhibit strong performance in the third Factory* 1.68 0.0% 0.6%
quarter of 2024, with advanced estimates showing that
Warehouse* 1.62 0.0% 1.3%
”On the investment front, investors will continue growth has accelerated to 4.1% year-on-year. In addition,
to favour new economy assets such as logistics, the Singapore Purchasing Managers' Index (PMI) reached Prime logistics 1.74 0.0% 2.4%
food technology, advanced manufacturing and 50.9, its highest level since August 2021, staying in Business Park 3.60 -1.1% -2.4%
data centres, as they capitalise on the growth of expansionary territory for twelve consecutive months
Prime Business Park 6.20 -1.1% -1.1%
structural trends that has led to the need for while non-oil domestic exports (NODX) grew by 10.7%
more modern facilities.” year-on-year, supporting a positive outlook. *Average of upper and lower floor rents
Recent developments, such as a long awaited 50 basis
points cut in US interest rates with potential further INDUSTRIAL STOCK: Q3 2024
The supply of industrial space is expected to increase reductions may help to alleviate financial pressures
significantly in 2025, with more than twice the supply globally, enhancing the investment climate and 5%
in 2024 coming on stream, before tapering off from potentially boosting international trade activities.
2026 onwards. Multi-user Factory
The pickup in sentiments may take a while as many 22%
business owners and investors still prefer to hold onto Single-user Factory
Consequently, the industrial sector will have to Business Park
cash, valuing the flexibility to adapt to the changing Total Stock
grapple with a supply-demand imbalance as a result 50%
of the higher supply and weak demand, leading to
market landscape and act on favourable opportunities. Warehouse 572.6 mil sf
slower pre-commitment to upcoming supply while In light of weaker demand and higher supply,
completed projects face lower occupancy. Colliers is projecting the overall annual industrial rent
growth for 2024 to moderate to between 2 to 4% (from 23%
In response to increasing competition and protracted
8.9% recorded in 2023) and price growth to between 1 to
weak demand, landlords are increasingly offering
3% (from 5.1% in 2023).
incentives such as fit-outs or rental promotions to
attract tenants. UPCOMING SUPPLY Multi-user Factory
Single-user Factory
16.0
14.8 Business Park
SIGNIFICANT UPCOMING PROJECTS AS OF Q3 2024 14.0
12.9 Warehouse
Project Name Developer GFA (‘mil sf) Expected TOP*
12.0
10.6
Estimated GFA (mil sf)
1 Warehouse at Sunview Rd Allied Sunview 1.26 2025 10.0
Single-user factory at Tampines Vanguard Power 8.0
2 2.64 2027
Industrial Avenue 1 Electronics
6.0
4.5
3 Business Park @ Punggol Way JTC Corporation 2.14 2024/2025 4.0
2.6
4 Bulim Square JTC Corporation 1.70 2025 2.0
5 Business Park @ Science Park Drive CapitaLand 1.21 2025 0.0
2024F 2025F 2026F 2027F 2028F
Source: Colliers, JTC. *TOP = Temporary Occupation Permit 3
For further information, please contact:
Catherine He Nicolas Menville
Head of Research Executive Director
Singapore Head of Singapore based
+65 6531 8563 Industrial Clients
catherine.he@colliers.com Singapore
+65 6531 8610
Nicolas.menville@colliers.com
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