Occupiers remain largely cautious on new space requirements

• While cost considerations and heightened global uncertainties generally weighed on new space needs in Q4 2024, there were some requirements (mostly ranging from 10,000 to 50,000 sq ft) from industrialists and logistics service providers.
• During the quarter, S F Express Singapore officially opened its airside logistics centre (spanning over 11,800 sq ft) at the SATS Core A warehouse in Changi Airfreight Centre.

No new multi-tenanted logistics/warehouse completions

• Commonwealth Kokubu Logistics’ new purpose-built warehouse at 8 Jalan Besut was partially completed in Q4 2024. The five-storey food logistics hub, with ambient, chilled and frozen warehouse space, is expected to be fully completed by 2025.
• Meanwhile, three new logistics/warehouse developments meant for lease remain on track to complete by 2025. They are: Mapletree Joo Koon Logistics Hub (formerly 51 Benoi Road), 36 Tuas Road and 5 Toh Guan Road East.

Rents and capital values hold steady for two consecutive quarters

• Occupiers remained cost sensitive in Q4 2024, keeping the average islandwide logistics/warehouse rent stable for the second consecutive quarter. As capital values moved in tandem with rents, yields stayed flat in Q4 2024.
• Investors remained keen to acquire logistics/warehouse assets. During the quarter, Frasers Logistics & Commercial Trust acquired its maiden warehouse in Singapore, paying ESR SGD 140.3 million for the facility at 2 Tuas South Link 1.

Outlook: Modest rent and capital value growth

• Barring the materialisation of downside risks, sustained manufacturing growth in 2025 should underpin demand. As new supply is mostly for owner occupation, quality space options for lease are expected to stay tight.
• Rent growth could resume in 2025, albeit modestly, due to occupiers’ cost sensitivity. Capital value growth could outpace rent growth on the back of sustained investor demand and lower borrowing costs, tightening yields along the way.