Singapore’s industrial sector experienced a dynamic second quarter in 2025, with demand for industrial space growing by 285,000 square metres. However, the completion of new industrial spaces outpaced demand, resulting in a slight dip in occupancy rates to 88.8%, according to a Huttons report.
The manufacturing sector, a key driver of the economy, expanded by 5.5% year-on-year, contributing to the overall economic growth of 4.2% in the first half of 2025.
The robust performance of the manufacturing sector was attributed to the frontloading of production and exports ahead of a 90-day tariff pause. This led to a 5.2% increase in non-oil domestic exports and double-digit growth in non-oil re-exports during the same period. Notably, the business park segment saw a positive shift, with occupancy rates rising by 0.9 percentage points to 76.7%, driven by increased tenant activity in the Punggol Digital District.
Despite the positive demand, the industrial market faced challenges. The number of transactions for multi-user factory and warehouse spaces fell by 14.3% compared to the first half of 2024, reflecting cautious buying sentiments amid tariff concerns. The largest strata sale was the 21 New Industrial Road property, sold for $62 million.
Price growth in industrial spaces stabilised, with a modest increase of 1.4% in Q2 2025. Rental rates also saw a slight uptick, with industrial space rents rising by 0.7% and business park rents by 1.2%. Looking ahead, the outlook remains cautious, with potential global trade slowdowns and tariff implications posing risks to Singapore’s trade-dependent economy.
“`
