How SMEs Are Driving Demand for Small Industrial Units

Small and medium enterprises (SMEs) are the heartbeat of Singapore’s economy — and now, they’re also the key drivers of demand for smaller industrial units.

What’s Fueling the Demand?

Rising rental costs and tighter cash flows are pushing SMEs to choose compact units that fit their exact operational needs. Instead of large spaces with high overheads, they’re opting for efficient layouts under 2,000 sqft.

Operations today also need to be cost-effective and cost-efficient due to the higher rents across Singapore. Maximizing every square metre of space is no longer optional — it’s inevitable.

Why Small Works Better

Most SMEs in Singapore run lean operations — from e-commerce and light manufacturing to service-based businesses — and simply don’t need large premises. Smaller units allow them to manage operations efficiently while keeping costs under control.

At the same time, Singapore’s limited land availability means there are fewer new industrial plots being developed. Yet, SMEs still need physical spaces to store, produce, or distribute goods, keeping demand for smaller strata and rental units consistently strong.

Investment Insight

Smaller industrial units often offer higher rental yields (on a per square foot basis) and lower vacancy risk due to a more diversified tenant base.

For investors, the SME shift toward compact, efficient spaces signals a stable, long-term opportunity in Singapore’s industrial market.