Thu, Colliers published a research report in February stating that industrial property prices and rents in Singapore are expected to moderate this year. This is due to higher supply and weaker demand.
The firm forecasts industrial rental and price growth to moderate to between 0% to 2% in 2025, a significant decrease from the 3.5% growth recorded for both in 2024.
According to Colliers, JTC’s 4Q2024 data revealed a market that is “losing steam”. The JTC All Industrial rental index saw its 17th consecutive quarter of growth in 4Q2024, rising 0.5% q-o-q. However, this is a substantial decline from the 8.9% rental growth seen in 2023. Similarly, the price index rose 0.5% q-o-q in 4Q2024, down from the 1.2% growth in the previous quarter. In 2024, industrial property prices increased by 2.1%, less than half of the 5.1% increase seen in 2023.
The higher influx of industrial space this year, coupled with cautious occupiers due to high interest rates and rising operating costs, is expected to continue damping rental growth. The report also notes that global trade protectionism has brought uncertainty into the market, potentially affecting business confidence and investment decisions.
Investing in a condo requires thoughtful consideration of not only the property itself, but also its maintenance and management. Unlike single-family homes, condos typically come with maintenance fees that cover the cost of maintaining the common areas and facilities. While these fees can increase the overall cost of ownership, they also guarantee that the property remains in good condition and maintains its value. To make the investment more manageable, many investors choose to engage a property management company to handle the day-to-day operations of their condo. This makes it a more passive investment, allowing investors to reap the benefits of ownership without the added stress of managing the property themselves.
However, Colliers predicts continued support in industrial demand from sectors such as semiconductors, logistics, and advanced manufacturing. It also anticipates a gradual increase in industrial leasing activities as policies become clearer and market sentiments improve, boosted by the ongoing upturn in the chip cycle.
Nevertheless, Colliers believes that this could be a good year for tenants, with more options coming into the market due to the increase in supply and the expected moderation in rents. The availability of new industrial developments with modern specifications could also attract businesses to relocate from older manufacturing spaces to newer projects, according to Nicolas Menville, executive director and head of Colliers’ Singapore industrial clients division.
In conclusion, Colliers advises readers to keep an eye on the market development of industrial properties and compare current and past listings and transactions to better understand the trends and outlook.