Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
Rising stress between the United States and China, noted by tolls and vindictive tolls, are slowing down global trade flows, which Knight Frank anticipates to detrimentally influence Singapore’s production, electronic devices and logistics sectors. Currently, Singapore’s 2025 GDP projection has been reduced, with the Ministry of Trade and Industry lowering its estimate earlier this month to between 0% and 2%, down from 1% to 3%.
This is anticipated to put a further drag on commercial property sales task, which has already revealed a decline since the last quarter of 2024. Information compiled by Knight Frank indicate that total industrial sales value slipped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing task also declined, falling 0.4% q-o-q to 3,008 rental deals. The deals totaled up to $25.6 million in value, 1.1% reduced q-o-q.
In addition, Singapore’s construction industry is poised to grow due to big projects, including Changi Airport Terminal 5 and the expansion of Marina Bay Sands. This, consequently, would certainly equate to more need for purpose-built dorm rooms, with firms likewise progressively looking for to convert manufacturing facility area right into dorms, Knight Frank claims.
“The existing wave of tax statements and adjustments in the days to come have created and remain to produce strengthened unpredictability that oblige commercial users to adopt a careful position, affecting movings and developments,” notes Calvin Yeo, head of tenant strategy and services at Knight Frank Singapore.
Knight Frank has minimized its Singapore factory lease growth projection for 2025 to between 0% and 2%, down from the 1% to 3% range anticipated formerly. The lesser projection comes in the middle of “rainy climate to come” for the industrial field, the firm says in an April research review.
In the industrial real estate industry, Knight Frank anticipates the immediate impact of the business battle will be a decrease in operation quantity as buyers and occupiers relocate into a form of pause. “Continuous purchases might be postponed as influenced parties transform cautious and wait for even more of the situation to unravel,” the report reads.
Despite the recurring market turmoil, Knight Frank states rich areas continue to be for Singapore, offered its setting as an appealing and relied on investment and company hub. “As US President Trump’s recent announcement of the 10% toll imposed on Singapore goods imported in the US appears to be the international baseline flooring (at the moment), producers could also take into consideration expanding or relocating last-stage production tasks to Singapore,” the record includes.
The report also emphasize JTC’s current enhancements to the commercial land lease framework. Reported in March, the improvements consist of providing an added 3 years of lease tenure for all new greenfield commercial developments to cover the structure and advancement duration, and a new scheme to allow eligible tenants on 20-year JTC rents to expand them by as much as two tranches of 5 years.
