JTC Quarterly Market Report Q&A: A Comprehensive Guide

Stay informed about the latest JTC Industrial Land Lease policy changes that aim to provide greater flexibility, certainty, and support for businesses. Below is a comprehensive overview of the enhancements and their implementation timelines.

1. Additional Three-Year Lease Tenure for New Greenfield Industrial Land Allocations

• Key Update: JTC will offer an additional three years of lease (with payable land rent/premium) for all new greenfield allocations requiring new building development. This ensures businesses can enjoy the full 20- or 30-year intended lease term.

• Why It Matters: Helps businesses cover building and development periods without sacrificing lease duration. Provides more predictability in operational and capital planning.

• Implementation Timeline: Immediate effect.

2. Introduction of the Flexible Lease Extension Initiative (FLEXI)

• Key Update: Eligible land lessees on 20-year JTC leases can extend their leases in up to two tranches of five years each. Businesses must demonstrate strong economic outcomes and commit to new plant and machinery investments to qualify.

• Why It Matters: Allows businesses to extend beyond the original 20-year term by up to an additional 10 years. Encourages sustained economic growth and investment within Singapore’s industrial landscape.

• Implementation Timeline: Targeted for 2H2025.

3. Earlier Lease Renewal Applications

• Key Update: JTC will bring forward the lease renewal application window from six years to ten years before the prevailing lease expiry.

• Why It Matters: Provides businesses with greater certainty about lease continuation well in advance. Facilitates long-term strategic planning, including expansion and technology upgrades.

• Implementation Timeline: Targeted for 2H2025.

4. Broader Recognition of Auditable Investments in Innovation and R&D

• Key Update: Beyond traditional Plant and Machinery (P&M) investments, JTC will recognize auditable investments in innovation, R&D, digital transformation, and Intellectual Property (IP) creation. This expanded definition aligns with evolving business models and supports value creation and productivity.

• Why It Matters: Encourages companies to invest in advanced technologies and IP, driving competitiveness and growth. Acknowledges modern forms of capital investments critical to innovation-driven enterprises.

• Implementation Timeline: Targeted for 2H2025.

Conclusion

These JTC Industrial Land Lease policy enhancements are designed to provide businesses with:

• Extended lease security for better long-term planning.

• Greater flexibility to adapt and grow.

• Incentives for innovation through recognition of diverse forms of investment.

For more information or to discuss how these changes can benefit your business, contact us or visit our website. Stay ahead with the latest updates and make the most of your industrial land lease tenure under JTC’s enhanced framework.

Thank you for your continued trust and partnership with Alliance Facilities Management Pte Ltd.

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• The occupancy rate stood at 89.0% in 1Q 2025, a testament to balanced market fundamentals. Despite ongoing global economic uncertainties, Singapore’s industrial sector shows resilience, driven by stable demand from key industries such as precision engineering, logistics, electronics, and biomedical manufacturing.

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• 53.5 million sqm of industrial space was available. This vast stock underpins Singapore's position as a regional hub for advanced manufacturing and supply chain operations, providing companies with a spectrum of space options tailored to diverse operational needs.

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• There was no quarter-on-quarter change, signaling that supply and demand were closely matched. This is critical for sustaining rental and price stability, ensuring that industrialists are neither pressured by excessive rent hikes nor faced with supply shortages.

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• On a year-on-year basis, the occupancy rate improved by 0.3 percentage points compared to 1Q 2024​. The increase is partly attributed to a low-base effect from early 2024 when new space completions briefly outstripped demand amid post-pandemic adjustments.

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• Yes. Stability around the 89% mark since 2023 shows that Singapore’s industrial base is underpinned by real economy sectors, contrasting with other markets where occupancy can be more volatile due to speculative development.

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• New supply and new demand were closely aligned, with a net increase of 0.2 million sqm in occupied space. This reflects effective government supply control, avoiding excessive vacancy while meeting industrialists' evolving space needs.

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• Prices grew 1.5% quarter-on-quarter and 5.3% year-on-year, indicating continued investor interest in industrial assets amid a broader environment of global monetary tightening and cautious capital markets.

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• Multiple-user factories, posting a 6.4% year-on-year price increase, benefited from heightened demand among SMEs and third-party logistics providers who value strata ownership models for flexibility and capital appreciation.

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• Single-user factory prices grew more modestly by 3.4% year-on-year, reflecting selective owner-occupier demand from manufacturing enterprises seeking to secure long-term operational certainty.

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• The strong price growth, even amid global uncertainties, affirms the defensive nature of Singapore industrial real estate as an asset class, offering rental income stability and long-term capital preservation for investors.

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• Rentals rose 0.5% quarter-on-quarter and 2.3% year-on-year, suggesting a healthy but controlled landlord-favorable environment, balancing business cost concerns with real estate investment viability.

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• The slowdown in rental growth — the slowest since 2021 — signals that rents are approaching sustainable equilibrium levels, avoiding excessive escalation that could erode Singapore’s competitiveness for manufacturers and logistics operators.

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• The 0.3% quarter-on-quarter growth is modest yet positive, as demand for smaller flexible spaces from light manufacturers and e-commerce players continues to underpin leasing activity.

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• The 0.8% rental rise indicates that larger companies are retaining and renewing existing premises rather than relocating, reflecting operational stickiness and business confidence in Singapore.

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• Business park rental growth of 1.2% quarter-on-quarter, despite occupancy weakness, suggests that high-specification spaces in strategic locations (e.g., One-North, Changi Business Park) remain attractive for technology and pharmaceutical sectors.

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• Warehouse rentals rose steadily by 2.0% year-on-year, driven by strong demand from 3PL providers, cold chain logistics, and e-commerce fulfillment players adapting to new consumer behavior.

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• 91.3% occupancy reflects the appeal of multiple-user factories offering a cost-effective solution for businesses seeking expansion without the burden of land ownership.

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• Occupancy improved to 88.6%, as regional manufacturers and heavy industries favor Singapore for its pro-business policies, talent pool, and connectivity.

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• Warehouse occupancy dipped slightly to 90.5%, a temporary adjustment due to new stock completions, with demand expected to catch up, especially from regional distribution centers.

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• The drop to 75.9% occupancy was anticipated due to structural shifts towards hybrid work and companies optimizing their space footprints in response to changing workforce needs.

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• The Kaki Bukit single-user site tender closed with one bid, highlighting niche demand for strategically located, larger industrial plots despite cautious capital expenditure sentiments.

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• The 0.80-hectare site with GPR 2.5 and 30-year lease offers operational flexibility and higher building density, ideal for advanced manufacturing or value-added logistics operations.

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• At $589 psm ppr, the pricing is competitive, reflecting calculated optimism among industrialists betting on Singapore’s long-term manufacturing expansion.

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• Only one bid, which is not unusual given current selective and disciplined investment strategies by industrial operators.

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• No. The 30-year tenure provides extended operational runway, especially attractive for companies making heavy upfront investments in equipment and facilities.

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• JTC allocated 69,700 sqm, showing proactive facilitation of space for industrialists to grow, scale, or relocate operations efficiently.

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• Land-based factory units accounted for the largest allocation, underscoring continued demand for ground-level operations, particularly from fabrication, assembly, and logistics industries.

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• Total returns of 59,900 sqm reflect healthy churn, allowing new entrants and expanding businesses to access quality industrial space.

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• 62% of returns were due to natural lease expirations or consolidations, indicating that tenants are managing costs prudently without broader distress signals.

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• Projects like Punggol Digital District and Tuas Biomedical Park reflect Singapore’s sectoral focus on digitalization, clean energy, and biopharmaceutical manufacturing.

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• An 8% year-on-year increase in sales transactions suggests that investors and occupiers are actively capitalizing on Singapore’s industrial growth trajectory, even in a high-interest rate environment.

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• Yes, a 2% increase supports the view that the industrial leasing market is dynamic, driven by business expansion and supply chain diversification strategies.

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• 0.7 million sqm is scheduled for completion, aligned with historical absorption rates, mitigating the risk of short-term oversupply.

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• Warehouses (32%), single-user factories (29%), multiple-user factories (29%), and business parks (10%), offering a diversified space pipeline catering to various user profiles.

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• 1.5 million sqm, mainly from large warehouse developments and integrated production hubs, supporting Singapore’s logistics and advanced manufacturing sectors.

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• An average supply of 1.1 million sqm per annum is well-moderated, balancing long-term industrial policy goals with real demand.

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• Historical trends of 0.9 million sqm supply and 0.6 million sqm demand suggest that upcoming supply remains within absorption capabilities barring economic shocks.

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• Smaller units (<200 sqm) dominate, aligning with the needs of startups, SMEs, and light manufacturing users seeking affordable entry points.

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• Approximately 749 units, totaling 130,000 sqm, offering varied opportunities for investors and end-users seeking capital growth or operational flexibility.

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• Occupancy is expected to remain stable, underpinned by consistent demand in logistics, advanced manufacturing, and electronics sectors.

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• Rentals should hold steady or grow moderately, as businesses remain committed to regional expansion plans despite global headwinds.

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• Downside risks include global economic downturns, geopolitical tensions, and supply chain reconfigurations, though Singapore remains resilient compared to regional peers.

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• By calibrating land supply, supporting new industrial formats, and investing in next-generation developments, JTC ensures industrialists have access to relevant, future-proofed spaces.