Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Singapore industrial sales weakened last quarter, amid a more mindful operating environment. JTC Corp’s sales caveat information shows that strata commercial sales dropped 17.5% q-o-q to 335 offers, the most affordable quarterly volume since 2020, claims Savills. “The subdued turnover reflects persisted purchaser selectiveness, with capital release largely concentrated in assets providing stronger basics, longer-term value preservation, or operational benefits,” the report includes.
As a result, Savills Singapore is forecasting general rental development across most industrial sectors to remain steady 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%.
While transaction quantity decreased, Savills keeps in mind that demand stays maintained for “well-positioned properties with an affordable complete value quantum”. Particularly, the company highlights a clear shift in customer choice towards industrial possessions with longer land periods.
Values of 30-year leasehold industrial possessions monitor by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, reflecting a lower hunger among capitalists for such possessions. In contrast, worths of 60-year leasehold possessions climbed up 1.4% q-o-q to $569 psf across the very same period. Freehold assets found even stronger growth, with rates increasing 2.9% q-o-q to $876 psf.
” The stronger performance of longer-tenure assets highlights a trip to quality and period safety and security, with investors progressively prioritising properties that supply greater long-lasting worth retention in a much more careful financial investment atmosphere,” the report describes.
Savills anticipates view in the industrial market to remain mindful, as the Middle East problem possibly evaluates on economic action in the forthcoming months. Versus this backdrop, capitalist and inhabitant need are expected to stay selective, skewing in the direction of “contemporary, well-located and higher-specification assets,” says Alan Cheong, executive supervisor for research and consultancy at Savills Singapore.
Industrial properties with a lot longer periods in Singapore are seeing higher need, as worldwide unpredictabilities prompt a flight to quality among occupants and investors, according to a study report by Savills Singapore.
In the rental market, general leasing quantity also moderated, with JTC rental data showing a 1.2% q-o-q decline to 2,867 deals in 1Q2026. On the other hand, rental price activities were combined, highlighting a more careful leasing market.
Rental fees for Savills’ basket of prime storage facility and logistics properties rose 0.4% q-o-q to $1.83 psf monthly, sustained by durable need for high-grade logistics facilities. On the other hand, leas for prime multiple-user factories tracked by Savills fell by 1.4% q-o-q to $2.27 psf, which the company attributes to “better occupier selectivity and rates level of sensitivity within the prime exclusive factory segment”.
