PRIME LOGISTICS RENTS START TO EDGE HIGHER
Warehouse and prime logistics rents grew by 1.1% qoq and 0.9% qoq respectively in Q3 2025. While overall leasing enquiries remain subdued, a few occupiers, such as third-party logistics players, are actively exploring consolidation of their existing warehouse footprints at prime logistics developments to enhance operational efficiency. Conventional factory rental growth moderated to 0.4% qoq amid still-cautious manufacturing sentiments. High-tech rents grew by 1.8% qoq in Q3 2025, as vacancy rate declined. Business park rents remained largely stable with city fringe business park rents rising slightly by 0.1% qoq while suburban business park rents saw no change in Q3 2025.
INDUSTRIAL SUPPLY PIPELINE LOOKS MANAGEABLE
The overall industrial supply pipeline looks reasonable, with higher supply for single-user factories and warehouses, though they have been largely precommitted. Recently completed and upcoming multi-user prime logistics developments have seen steady take-up rates or under advanced negotiations (~50% to 60%).
New multi-user factory supply remains limited, with new annual supply over the next few years below their 10-year annual average. Business park demand continues to diverge between city-fringe and suburban locations, with average vacancy rates at 7.9% for city fringe business parks and 28.3% for their suburban counterparts. Nonetheless, following a supply surge in 2025, the
supply pipeline for new business parks is expected to taper off sharply from 2026 onwards, which may lead to improving occupancy rates. The widening rental gap between office and business park is expected to increase the value proposition of business parks, especially for suburban business parks.
