Vacancy of Single- & Multiple-User Factory stayed flat at 10.9% and 9% respectively
Business Park experienced stability in Vacancy but Rents saw slight drop
Savills Q3 Industrial Report shares that total leasing volume declined by 4.5% YoY to 3,061 tenancies in Q3/2025. This was almost the same as the quarterly average of 3,065 deals for the last three years (2022 to 2024).
The factory and warehouse segments faced cautious sentiment and slower leasing activity in Q3, with demand falling across the board in the quarter. While single-factory segment recorded a decline of 17.5% YoY in Q3, multiple-user factory and warehouse segments posted a marginal decrease of 4.0% and 1.6% YoY respectively
Although demand showed signs of moderating but with new supply limited, the vacancy rate for single- and multiple-user factory stayed relatively flat at 10.9% and 9.0% respectively in Q3. The warehouse vacancy rate eased by 0.8 percentage point (ppt) QoQ to 10.4% in Q3, underpinned by a healthy net take-up of over 1.1 million sq ft in the West Planning Region. This could be attributed to the major new completion - Maersk’s World Gateway 2, which was fully pre-committed.
According to Savills’ basket of private industrial properties, prime warehouse and logistics properties[1] monthly rents increased at a faster rate in Q3, rising 4.3% QoQ to S$1.82 per sq ft. Meanwhile, multiple-user factory saw muted rental growth, with JTC’s rental index climbing by 0.4% QoQ in Q3 (compared QoQ in Q2). Savills’ prime multiple-user factory[2] monthly rents slipped by 0.3% QoQ to S$2.25 per sq ft in Q3.
Compared to the 418 transactions recorded in Q2, the strata industrial sales momentum[3] remained steady in Q3 with 406 transactions recorded in the quarter. Nonetheless, it fell below the quarterly average of 444 deals in the last three years (2022 to 2024). Despite the lower interest rates, investor sentiments remain clouded by heightened volatility stemming from the tariff uncertainty, hence adopting a wait-and-see approach and delaying investments.
Tang Boon Kiat, Associate Director, Industrial & Logistics, Savills Singapore, “Global economic uncertainty continues to weigh on occupiers as businesses manage risks and prioritize stability. Prime logistics segment remains the bright spot for the industrial sector and the lack of fresh, substantial demand drivers for business parks and high spec industrial spaces is seen mitigated by proactive lease onboarding and management amongst Asset Owners.
Amidst macroeconomic volatility, high value growth industries such as artificial intelligence, semi-conductors and biomedical could provide near-term leasing impetus. “
Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore, “While leasing momentum could potentially remain muted in the near term, demand for modern and high-spec industrial space is likely to remain resilient as occupiers continue to prioritise space efficiency. Furthermore, with limited pipeline supply for factory and warehouse spaces in the near term, rents and vacancy rate for modern industrial spaces with high specifications are expected to stay firm for the rest of the year.”
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[1] Based on JTC’s rental data (excluding business park spaces, only comprises single- and multiple-user factory as well as warehouse spaces).
[2] Based on Savills basket of private multiple-user factory properties which ranges from 1,000 sq ft to 3,000 sq ft in size, with an average monthly asking rent of at least S$1.50 per sq ft.