Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Singapore industrial sales weakened last quarter, amid a more mindful operating setting. JTC Corp’s sales caveat 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 subdued turn over reflects continued customer selectiveness, with funding implementation mostly concentrated in assets offering more powerful principles, longer-term value conservation, or operational benefits,” the report includes.
Rents for Savills’ basket of prime storehouse and logistics possessions climbed 0.4% q-o-q to $1.83 psf monthly, sustained by resilient demand for high-grade logistics facilities. On the other hand, leas for prime multiple-user factories tracked by Savills plunged by 1.4% q-o-q to $2.27 psf, which the company credits to “higher occupier selectivity and prices level of sensitivity within the prime exclusive factory sector”.
In the rental market, general leasing volume also moderated, with JTC rental data revealing a 1.2% q-o-q decrease to 2,867 transactions in 1Q2026. At the same time, rental price motions were mixed, underscoring a more selective leasing market.
” The more powerful performance of longer-tenure possessions emphasizes a flight to quality and tenure protection, with investors progressively prioritising assets that use higher lasting worth retention in a more discerning investment environment,” the report explains.
Industrial properties with a lot longer tenures in Singapore are seeing greater demand, as international unpredictabilities prompt a flight to quality amongst occupiers and investors, according to a research report by Savills Singapore.
While deal volume decreased, Savills keeps in mind that need remains maintained for “well-positioned assets with a sensible overall value quantum”. Specifically, the company highlights a clear change in customer preference towards industrial possessions with longer land periods.
As a result, Savills Singapore is predicting total rental growth across most industrial sectors to stay stable this year. The firm is forecasting rental growth for multiple-user factories and business parks to find in between 0% and 2% in 2026, whilst warehouse and logistics rents are expected to grow between 0% and 1%.
Savills expects sentiment in the commercial market to continue to be mindful, as the Middle East problem possibly evaluates on economic event in the forthcoming months. Versus this background, capitalist and inhabitant need are prepared for to remain careful, skewing towards “modern, well-located and higher-specification assets,” says Alan Cheong, executive director for research and working as a consultant at Savills Singapore.
Values of 30-year leasehold industrial possessions monitor by Savills fell 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lower cravings among investors for such properties. In contrast, values of 60-year leasehold assets climbed 1.4% q-o-q to $569 psf across the very same duration. Freehold properties found even more powerful growth, with costs rising 2.9% q-o-q to $876 psf.
