JLL commentary on JTC Quarterly Market Report 3Q2026

• Singapore's All Industrial Rental Index rose 0.5% quarter-on-quarter and the All Industrial Price Index increased 1.0% quarter-on-quarter in the third quarter of 2026, extending the growth trend recorded in the second quarter and reflecting sustained global semiconductor demand tied to AI-related investment.
• Occupancy levels in Singapore's multi-user and single-user factory segments each fell by 0.2 percentage points in the third quarter of 2026, as geopolitical tensions prompted occupiers toward cost-cutting and space optimization even as underlying industrial demand stayed firm.
• JLL forecasts Singapore's All Industrial Rental Index to grow 2% to 3% and the All Industrial Price Index to grow 3% to 4% for full-year 2026, supported by semiconductor sector order backlogs and continued capital inflow into Singapore as a safe-haven market, though geopolitical risks and investor scrutiny of AI infrastructure returns could temper near-term momentum.

SINGAPORE, 22 October 2026 – JTC released its Quarterly Market Report for 3Q2026. 

Dr Chua Yang Liang, Head of Research and Consultancy, Southeast Asia
蔡炎亮博士, 研究与咨询部主管 (东南亚) commented:

Global demand for semiconductor supports industrial rents growth

Global demand for semiconductors surged on the back of continual investment into AI. Asia Pacific economies including Southeast Asia countries like Singapore and Malaysia are firmly plugged into this growth driver. Consequentially, Singapore’s islandwide industrial property market continues to maintain a stable rental growth trend, mirroring the growth rate of the previous quarter.

Ongoing geopolitical tensions are starting to weigh on occupier sentiment, with cost-cutting and space optimization efforts beginning to impact overall occupancy levels, although underlying industrial demand remain firm. Occupancy levels fell by 0.2 percentage points in both the multi-user factory and single-user factory segment.

According to JTC’s industrial property statistics, the All Industrial Rental Index rose by 0.5% quarter-on-quarter (q-o-q) in 3Q 2026, while the All Industrial Price Index increased by 1.0% q-o-q, extending the growth trend recorded in 2Q26.

Leading indicators corroborate the global demand story

Leading indicators continue to reflect steady underlying demand as Singapore's PMI rose slightly to 51.7 in September from 51.5 the previous month, marking the 14th consecutive month of expansion above the 50-point threshold. The electronics PMI also remained expansionary at 52.9, reaching its highest level since January 2018.

This sustained momentum aligns with ongoing strength in the electronics and semiconductor ecosystem, underpinned by strong global AI-related demand. Global semiconductor sales corroborate this momentum, with Asia Pacific sales growing at nearly the same pace as worldwide sales. This suggests the AI-driven upcycle is reaching the region’s production base, lending demand support for industrial spaces in the region, including those in Singapore.

EDB's latest Business Expectations Survey (3Q 2026) reported an overall net weighted balance of +12% for improved manufacturing business conditions for July – December 2026, an improvement from the first half of 2026.

The positive sentiment was led by the precision engineering cluster (+55%), buoyed by semiconductor-related equipment firms within the machinery & systems segment amid robust global AI-related investment. The electronics cluster (+19%) also expressed favourable expectations, with the semiconductor segment continuing to benefit from strong demand for AI-related applications.

Note: “Net weighted balance” reflects the balance of firms expecting conditions to improve versus worsen; it is not the magnitude of change. 

The future looks firm but keep an eye on the risks

Singapore's economic growth outlook has been revised upward, reflecting stronger-than-expected performance in the first half of the year alongside accelerating global AI-related capital outlays supporting the manufacturing sector. That said, geopolitical tensions in the Middle East continue to inject uncertainty, with elevated energy and freight costs prompting businesses to adopt leaner operational models and delay expansion plans until greater clarity emerges. Likewise, the growing investors’ scrutiny over the returns from AI infrastructure spending could put a drag on future capital inflow.

Nonetheless, we expect the demand for high-specification premises to remain firm supported by order backlogs in the semiconductor sector, though near-term rental growth will likely be constrained by cost pressures and ongoing global disruptions.

Rents are likely to remain on a more modest path alongside prices. We estimate the All Industrial Rental Index for full year 2026 may see an upside of 2-3%, given stronger near-term economic performance and continual appetite for premium assets. The All Industrial Price Index should record some 3-4% growth, as capital continues to seek shelter in safe havens like Singapore, driving further marginal yield compression as we have seen in 3Q26.

What happened to Singapore's industrial property rents and prices in the third quarter of 2026?
 

Singapore's All Industrial Rental Index rose 0.5% quarter-on-quarter and the All Industrial Price Index increased 1.0% quarter-on-quarter in the third quarter of 2026, extending the growth trend seen in the second quarter of the year.

Why are industrial rents in Singapore continuing to grow?
 

Growth is being driven by surging global demand for semiconductors, fueled by continual AI-related investment, which is benefiting Asia Pacific economies — including Singapore and Malaysia — and supporting steady industrial rental momentum across the island.

Did occupancy levels change in the third quarter?
 

Yes. Occupancy fell by 0.2 percentage points in both the multi-user factory and single-user factory segments, as geopolitical tensions led some occupiers to pursue cost-cutting and space optimization, even though underlying industrial demand remained firm.

What do leading indicators suggest about future industrial demand?
 

Singapore's Purchasing Managers' Index rose to 51.7 in September 2026, marking 14 consecutive months of expansion above the 50-point threshold, while the electronics PMI reached 52.9 — its highest level since January 2018 — both signaling continued strength in the electronics and semiconductor ecosystem.

What is JLL's outlook for industrial rents and prices through the rest of 2026?
 

JLL expects the All Industrial Rental Index to grow 2% to 3% and the All Industrial Price Index to grow 3% to 4% for full-year 2026, supported by semiconductor order backlogs and continued capital inflow, though geopolitical tensions in the Middle East and growing investor scrutiny of AI infrastructure spending could constrain the pace of growth.