JTC's Bulim Square in the Jurong Innovation District. (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Singapore’s manufacturing industry weathered a patchy 2025 marked by global uncertainty. Manufacturing sentiments dived following the US’s announcement of “Liberation Day” tariffs on April 2, with the government subsequently cutting its 2025 GDP forecast to 0% to 2%, down from its original forecast of 1% to 3%, citing a deterioration in the country’s external demand outlook.
The Singapore Purchasing Managers’ Index (PMI), an economic indicator that gauges factory activity, also fell in April, ending a 19-month growth streak. The PMI fell to 49.6 points, below the 50-point threshold that indicates economic expansion.
Things stabilised in the following months as the US introduced a 90-day pause on tariffs, followed by trade deals negotiated with several countries. Singapore reported a GDP growth of 4.7% y-o-y in 2Q2025, bolstered by front-loading activities by manufacturers and exporters seeking to expedite the movement of goods ahead of tariffs kicking in. After two months of contractions, the PMI also returned to expansionary levels in June.
In the third quarter of the year, GDP grew by 4.2% y-o-y, beating estimates and prompting the Ministry of Trade and Industry (MTI) to upgrade its full-year GDP forecast to around 4%, roughly on par with the 4.4% growth achieved in 2024. In November, Singapore’s manufacturing output jumped 29.1% y-o-y, surpassing expectations.
Amidst the economic fluctuations, the domestic industrial property market has generally stayed resilient. “The sector was supported by sustained investment activity, rising capital values and rentals, as well as steady manufacturing output,” says PropNex in its 2026 property market outlook report.
JTC data shows that rents for local industrial properties continued to chart quarterly growth over the first three quarters of the year, with the All Industrial Rental Index climbing 0.5%, 0.7% and 0.5%, respectively. The index has now grown for 20 quarters straight, rising a cumulative 25.3% since bottoming out in 3Q2020, says CBRE.
Industrial property prices have also continued to grow throughout the year, backed by steady sales volume. The All Industrial Price Index logged quarterly increases of 1.5%, 1.4%, and 0.6% in the first three quarters of the year. To date, industrial sales value has totalled $4.15 billion across 1,579 transactions between January and November, says PropNex. “The sales value in 2025 has outperformed the tally in each of the past three years,” its report adds.
While industrial rents have broadly continued to grow, performance remains mixed across different sub-segments. In 3Q2025, rents for the warehouse segment rose 0.9% q-o-q, gaining momentum from the 0.4% q-o-q growth the previous quarter. CBRE attributed the positive movement to strong take-up for prime logistics space by major third-party logistics firms.
Rents for the multi-user factory and single-user factory segments also recorded growth, increasing 0.7% and 0.4% q-o-q, respectively.
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On the other hand, overall rents in the business park segment dipped 0.2% q-o-q in 3Q2025, amid the continued divergence in performance among newer and older facilities, says CBRE. “While newer facilities in City Fringe locations see strong demand, which brought up average rents, selected assets in Rest of Island locations experienced downward pressure due to ageing specifications and flight-to-quality trends.”
Still, overall occupancy has stayed stable, rising 0.3 percentage points q-o-q to 89.1% in 3Q2025. All segments reported marginal increases last quarter except for the multiple-user factory segment, which remained unchanged.
Looking ahead, Singapore’s economy is expected to see slower growth in 2026 as the full impact of the US tariffs becomes apparent, coupled with an expected slowdown in manufacturing and trade-related services sectors compared to 2025. MTI is forecasting a GDP growth of 1% to 3% next year.
At the same time, over 1.15 million sq m of new industrial space is expected to enter the market in 2026, rising from around 798,000 sq m in 2025, according to JTC. About 61% of this will be single-user factory space, which is already pre-committed by end-users, while multiple-user factory and warehouse space account for the remaining 36% and 3%, respectively.
PropNex notes that a further 1.88 million sqm of space will be completed in 2027. “This substantial pipeline is a risk to watch, should demand for industrial space soften in the event of economic uncertainty, export slump or supply-chain pressures,” the firm notes.
Chart 2: Supply Pipeline Across All Industrial Segments
(Source: JTC, Cushman & Wakefield Research)
Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield, says that the majority of upcoming warehouse stock next year is for single-users. “As of 3Q2025, there are no new multi-user prime logistics developments to be completed in 2026,” he adds.
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Given the limited available supply, he believes industrial rents could see moderate growth in 2026, supported by recovering business confidence and strengthening demand for high-value manufacturing and logistics space, due to the Republic’s favourable tariff position within the region.
Nonetheless, rental growth will continue to be uneven across the various segments. Wong anticipates prime logistics rental growth could moderate to around 0% to 2% in 2026, compared to his 1% to 2% estimate for 2025, tempered by tenant resistance and competition from the Johor-Singapore Special Economic Zone (JS-SEZ).
In the business park segment, he expects city fringe business parks to continue outperforming suburban locations, with rents in the latter forecasted to grow between 1% to 2%, on par with this year. “Going forward, a tight office supply situation and accelerating rent growth for Grade A offices could drive some tenants that do not need to be in the CBD towards business parks,” he adds.
Catherine He, Colliers Singapore’s head of research, observes that after 20 consecutive quarters of rental increases, occupiers are becoming more cost-conscious. “Coupled with the global trade uncertainty and tariff risks, many firms are more likely to delay their long-term commitments, opt for shorter flexible leases, consolidating footprints and seeking fitted space or landlord capex support,” she adds.
The push for cost-efficiency may compel more manufacturers to relocate to areas such as the JS-SEZ, notes Alan Cheong, executive director of research and consultancy at Savills Singapore. “Some industrial companies had already been shifting some operations to Malaysia even before the JS-SEZ was initiated,” he says. He expects the trend to continue, particularly for labour-intensive companies.
However, Singapore is expected to remain the preferred market for high-value manufacturing operations. PropNex adds that the government has committed significant resources to sectors such as green energy, artificial intelligence, data centres, and semiconductor manufacturing, which may help underpin medium- to long-term industrial demand.
In any case, demand for industrial properties in 2026 will continue to be backed by the logistics, biomedical and advanced manufacturing industries, says Colliers’ He. “Logistics and data centre demand will continue to see the strongest growth due to limited supply as well as on the tailwinds of trends such as digitalisation and supply chain disruption,” she says. Colliers is projecting overall industrial rents and prices to grow by about 1% to 3% next year.
Meanwhile, Savills’ Cheong estimates that rents for multiple-user factories could climb up to 3% next year, while warehouse and logistics rents could see growth of up 2%.