Higher supply and weaker demand to put downward pressure on industrial property rents: Colliers
According to Colliers, the source of commercial sector is anticipated to expand this year, with over 2.5 times the supply last year coming on stream before reducing from 2026 onwards. “This surge in supply has caused today supply-demand inequality with segments of the market currently observing upcoming supply with slower precommitments or finished ventures with reduced tenancy,” the file states.
Furthermore, heightened trade protectionism has brought unpredictability right into worldwide markets, possibly impacting business confidence and financial investment choices.
Industrial property prices and rents in Singapore are expected to regulate this year amid greater supply and weaker demand, according to a February research study report by Colliers. The firm is predicting both overall annual industrial rental and rate growth to moderate to in between 0% to 2% in 2025, contrasted to the 3.5% growth chalked up for both last year.
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The low-key overview happens as JTC’s 4Q2024 information suggested a market place that is “slowing”, claims Colliers. The JTC All Industrial rental index charted a 17th successive quarter of expansion in 4Q2024, rising 0.5% q-o-q and bringing complete progress for the year to 3.5%. However, this notes a substantial decline from the 8.9% rental development visited 2023.
In the meantime, given the bump in supply and the predicted moderation in rental fees, this could be a good year for tenants with more options involving market, claims Colliers. “New commercial developments, outfitted with even more modern specifications, might urge much more firms to relocate from older, ageing manufacturing sectors to newer projects,” claims Nicolas Menville, executive manager and head of Singapore-based commercial customers for Colliers.
On the other side, Colliers prepares for commercial need to continue to be supported by the semiconductors, logistics and advanced production industries. It also anticipates industrial leasing ventures to see a gradual ramp-up over time as plans end up being clearer and market views strengthen, underpinned by the continuous upturn in the chip cycle.
The greater supply, combined with enhanced caution amongst tenants because of persistently high interest rates and rising business expenses, is anticipated to continue dampening rental increase.
The consumer price index likewise increased 0.5% q-o-q in 4Q2024, relieving from the 1.2% development in the previous quarter. Last year, industrial property prices increased 2.1%, much less than half of the 5.1% rise documented the year before.
