Singapore’s commercial and industrial property markets maintained steady footing throughout the third quarter of 2025, characterized by moderated growth momentum across both segments despite persistent macroeconomic headwinds.
The industrial sector demonstrated particular resilience, achieving its twentieth consecutive quarter of rental growth, though at a decelerating pace that reflected broader market conditions. The all-industrial price index rose 0.6% quarter-on-quarter, representing the slowest expansion since Q3 2024. Meanwhile, the industrial rental index registered 0.5% quarterly growth and 2.3% year-on-year appreciation.
Singapore’s overall occupancy rate for industrial premises reached 89.1% in Q3 2025, up 0.3 percentage points from the previous quarter. The vacancy rate declined to 10.9%, the lowest level since Q4 2022.
Industrial occupancy in Singapore reached 89.1% in Q3 2025, with vacancy hitting its lowest level since Q4 2022.
Within the industrial market, rental performance varied across segments. The warehouse segment led growth at 0.9% quarterly appreciation, single-user factory rents increased 0.7% quarterly, and business park rents declined marginally by 0.2% quarter-on-quarter. Warehouse occupancy strengthened significantly, with occupancy up 0.8 ppt to 89.6%. Multiple-user factory occupancy remained stable, indicating balanced supply-demand conditions in this segment.
The commercial sector demonstrated stronger momentum, with commercial sales value surging 57.2% quarterly to SGD 2.5 billion. Investment volumes reached $10.294 billion in Q3 2025, representing a 64.3% quarterly and 10.3% year-on-year increase and marking a seven-year high. Real estate investment growth reflected Singapore’s position as a safe haven for investors seeking stability amid global market turbulence.
Core CBD Grade A office rents increased 0.8% quarterly to $12.20 per square foot monthly, and islandwide prime retail rents climbed 0.5% quarterly.
Price appreciation continued to outpace rental growth for the sixth consecutive quarter, driven by sustained investor interest despite moderating economic expansion.
The manufacturing sector, indicated by the PMI at 50.1 in September 2025, showed mild expansion supported by easing inflation and declining interest rates, underpinning business confidence.
Supply dynamics remained constrained, with Q4 2025 anticipated to deliver 2.26 million square feet of new industrial space. This new supply is primarily allocated to single-user factories at 61% and multi-user factories at 35.6%. No new business park completions are expected. The 3.6 million square meters of space scheduled for completion between 2026-2028 will support sustained industrial growth, ensuring adequate supply to meet evolving occupier demands.
Third-party logistics players demonstrated robust demand for quality properties, particularly in prime logistics developments. This reflects broader consolidation trends and efficiency-seeking behavior among occupiers pursuing flight-to-quality strategies.
