Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Savills anticipates belief in the commercial market to stay mindful, as the Middle East dispute potentially weighs on economic event in the forthcoming months. Against this backdrop, capitalist and inhabitant need are prepared for to stay selective, skewing in the direction of “modern, well-located and higher-specification assets,” states Alan Cheong, executive supervisor for research and consultancy at Savills Singapore.
” The stronger performance of longer-tenure possessions underscores a flight to quality and tenure safety and security, with financiers significantly prioritising assets that supply better long-lasting value retention in a much more careful financial investment atmosphere,” the record discusses.
Consequently, Savills Singapore is forecasting total rental growth across most industrial segments to stay secure this year. The firm is forecasting rental development for multiple-user factories and business parks to come in between 0% and 2% in 2026, whilst warehouse and logistics rents are anticipated to grow between 0% and 1%.
In the rental market, total leasing volume also regulated, with JTC rental data showing a 1.2% q-o-q decrease to 2,867 deals in 1Q2026. On the other hand, rental price movements were mixed, underscoring a much more selective leasing market.
Singapore industrial sales weakened last quarter, amid a more mindful operating atmosphere. JTC Corp’s sales caution data shows that strata industrial sales dropped 17.5% q-o-q to 335 offers, the most affordable quarterly volume since 2020, says Savills. “The controlled turnover reflects continued purchaser selectivity, with funding release mostly concentrated in assets offering more powerful basics, longer-term worth preservation, or functional advantages,” the record adds.
Values of 30-year leasehold industrial possessions tracing by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, reflecting a lesser appetite among capitalists for such assets. On the other hand, values of 60-year leasehold possessions climbed 1.4% q-o-q to $569 psf throughout the same period. Estate properties saw even more powerful development, with costs rising 2.9% q-o-q to $876 psf.
Rental fees for Savills’ basket of prime storehouse and logistics possessions increased 0.4% q-o-q to $1.83 psf each month, supported by resilient need for high-quality logistics facilities. On the other hand, rents for prime multiple-user manufacturing facilities tracked by Savills plunged by 1.4% q-o-q to $2.27 psf, which the company attributes to “higher occupier selectivity and prices level of sensitivity within the prime exclusive factory section”.
While deal volume declined, Savills notes that need remains continued for “well-positioned assets with a reasonable overall worth quantum”. Specifically, the company highlights a clear shift in purchaser choice towards industrial possessions with longer land tenures.
Industrial properties with a lot longer periods in Singapore are observing higher need, as international unpredictabilities prompt a flight to quality amongst tenants and investors, according to a research report by Savills Singapore.
