What 'Warehouse Space to Let' Really Means in Singapore Today: The Hidden Shift to High-Tech Hubs

The Evolving Landscape of Singapore's Industrial Property

Singapore's industrial property market is undergoing a significant transformation. Beyond traditional manufacturing and logistics, powerful new drivers are reshaping demand, revealing a "hidden shift" towards highly specialised, high-tech hubs.

Digital transformation, the e-commerce boom, and a national focus on food and health security are fundamentally altering the requirements for industrial space in Singapore.

This article will explore how surging demand for advanced cold storage facilities and strategically located last-mile delivery hubs are significant new engines of growth. This shift is creating new opportunities and considerations for landlords (developers/investors) and occupiers (tenants) in 2025.

Why This Matters Now (Market Snapshot 2025):

Segmented Rental Growth: While overall industrial rental growth shows signs of moderation (e.g., JTC's all-industrial rental index rose 0.5% q-o-q in Q3 2025), the warehouse segment is a clear outperformer, leading growth at 0.9% q-o-q.¹

Wave of New Supply: A significant wave of new space is projected, with JTC forecasting approx. 1.2 million sqm of industrial space to be completed in 2025 (of which warehouses account for ~38%) and another 2.1 million sqm in 2026-2027.² This will increase competition for older, general-purpose assets.

E-commerce Surge: Singapore's e-commerce market is valued at approx. $5.02 billion in 2025 and is projected to grow at an 11% CAGR through 2033, creating sustained, long-term demand for efficient logistics.³

Flight to Quality: There is a growing preference for high-specification (high-spec) industrial spaces, with technology and manufacturing firms actively seeking modern facilities that can support automation and advanced operations.

Cold Storage: A High-Demand, Specialised Sector

The Rise of Temperature-Controlled Logistics:

Growth in F&B and Pharmaceuticals: Demand is being driven by e-commerce grocery demand and the expansion of biotech and pharmaceutical industries (e.g., vaccine storage, biologics).

Singapore's '30 by 30' Food Security Goal: The national push to produce 30% of nutritional needs locally by 2030, combined with a strategy of stockpiling and diversifying imports, fundamentally relies on a robust, state-of-the-art cold chain.⁶

Singapore's Hub Status: Its role as a regional hub for life science manufacturing¹⁰ and food innovation boosts demand for specialised cold chain infrastructure.

Market Projections: Reflecting this, Singapore's cold storage market is expected to reach US$8,192.8 million by 2030, expanding at a remarkable CAGR of 21.2% from 2025-2030.⁴

Specific Requirements for Cold Storage Facilities:

Complex Specifications: Need for multi-temperature zones (chilled, frozen, deep-frozen), precise humidity control, and high energy efficiency.

Energy Efficiency & ESG: High energy consumption means a strong focus on sustainable systems (e.g., smart HVAC, insulation) to reduce operational costs and meet green goals.

Regulatory Compliance: Adherence to strict food safety (SFA) and pharmaceutical (HSA) regulations is non-negotiable.

Investment & Development Trends in Cold Storage:

Integration with Automation: Widespread use of Automated Storage and Retrieval Systems (ASRS) to maximise vertical space, ensure product integrity, and improve efficiency.

Built-to-Suit Solutions: Companies increasingly seeking bespoke (built-to-suit) facilities tailored to their specific temperature and compliance needs.

Last-Mile Delivery: How E-Commerce Drives Demand for Urban Hubs

E-commerce Boom and Consumer Expectations:

It is no secret how the rise of e-commerce is changing the logistics real estate⁹, and this trend is the primary catalyst for the last-mile boom. Consumers now expect same-day or next-day delivery, putting immense pressure on logistics networks to be faster and more efficient.

Market Projections: Singapore's last-mile delivery market was valued at approx. $1.21 billion in 2022 and is projected to more than double, reaching **$2.64 billion by 2032**, growing at a CAGR of 8.15%.⁵

Characteristics of Last-Mile Logistics Hubs:

Proximity to Urban Centres: Location is critical. These facilities must be in city-fringe or decentralised urban areas to ensure rapid delivery.

High-Intensity Operations: These hubs are designed for high throughput, requiring advanced sortation systems, robotics, and numerous dedicated loading/unloading bays.

Emerging Trends in Last-Mile Logistics:

Decentralised Warehousing: A shift from large, centralised warehouses to multiple smaller urban depots and micro-fulfilment centres.

"Dark Stores": Converting traditional retail spaces into localised e-commerce fulfilment hubs.

Green Logistics: Adoption of electric vehicles (EVs) for delivery fleets to align with sustainability goals and Singapore's Green Plan 2030.

Impact on Singapore's Industrial Property Market

Changing Demand for Traditional 'warehouse space to let':

This is leading to a clear change in demand for traditional warehouse space to let.

Premium for Specialised Assets: Stronger demand and rental growth for modern, high-spec cold storage and last-mile facilities compared to older, general-purpose warehouses.
Location Focus: A clear split in demand, with last-mile operators prioritising city-fringe locations, while cold storage operators may cluster near food zones (e.g., Jurong Fishery Port) or transport nodes.
Older Stock Obsolescence: Older, less efficient warehouses without high-spec features (e.g., high ceilings, heavy floor load, large loading bays) face increasing rental pressure and vacancy risk from the incoming new supply.

Rental & Vacancy Trends (as of Q3 2025):

Overall Moderation: While the new supply wave is moderating overall rental rises, prime logistics and specialised segments continue to outperform.
Resilient Occupancy: The overall occupancy rate for industrial property remains healthy, with warehouse occupancy rising to 89.6% in Q3 2025, indicating that strong demand is absorbing new, high-quality stock.¹

Opportunities for Landlords and Occupiers

Landlords (Investors/Developers):

Specialised Niche Investments: While barriers to entry are high due to significant capital cost and technical expertise, investing in purpose-built or retrofitting assets for cold storage and last-mile can offer premium, long-term returns.
Focus on Specialised Operators: The cold storage market, in particular, is dominated by specialised players. While some REITs are active (e.g., ESR-LOGOS REIT's planned redevelopment of its Cold Centre at 2 Fishery Port Road⁷), the field includes dedicated operators like Storbest, Alliance Cold Storage, and Lineage Logistics.⁸
Development Opportunities: Partnering with these specialised operators to develop new, state-of-the-art facilities is a key growth strategy.

Occupiers (Businesses seeking 'warehouse space to let'):

For occupiers (businesses seeking warehouse space to let), the landscape is also shifting.

Optimising Supply Chains: Businesses must seek technologically advanced spaces to enhance efficiency and meet evolving customer demands.
Hub-and-Spoke Models: Many occupiers are now exploring a "hub-and-spoke" model, combining a larger central distribution centre with smaller, decentralised last-mile hubs.
Negotiating Leases: Occupiers seeking general-purpose space may be able to leverage the new supply wave to negotiate favourable terms. Conversely, those needing specialised cold storage or prime last-mile locations must be prepared for rental premiums.

Challenges and Future Outlook

Challenges:

High Land and Operational Costs: Singapore's limited land and high energy costs remain key challenges, especially for energy-intensive cold storage.

Technological Obsolescence: The pace of automation means facilities must be "future-proofed" to avoid becoming outdated.

Labour Shortages: Continued manpower constraints in the logistics sector will only accelerate the drive towards automation.

Future Outlook:

Continued Specialisation: The industrial market will become even more segmented by asset type and technical capability.

Sustainability as Standard: Green features and energy efficiency will transition from a "nice-to-have" to a baseline expectation for occupiers and investors.

Conclusion

The industrial property landscape is not evolving from one sector to another, but is instead expanding, with multiple, separate drivers like cold storage and last-mile delivery creating new, concurrent demands. This 'hidden shift' means that for both landlords developing properties and occupiers seeking solutions, success in Singapore's dynamic market now depends on understanding this move towards specialised, high-tech, and strategically-located industrial facilities.