Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Savills anticipates view in the industrial market to remain cautious, as the Middle East conflict potentially evaluates on economic activity in the following months. Against this background, financier and occupier demand are expected to remain selective, skewing towards “modern, well-located and higher-specification assets,” claims Alan Cheong, executive director for research and working as a consultant at Savills Singapore.
” The stronger performance of longer-tenure properties highlights a trip to quality and period security, with capitalists progressively prioritising properties that offer better long-lasting worth retention in a more careful investment environment,” the record explains.
Rents for Savills’ basket of prime storage facility and logistics possessions increased 0.4% q-o-q to $1.83 psf each month, supported by durable demand for top notch logistics centers. On the other hand, leas for prime multiple-user manufacturing facilities tracked by Savills dropped by 1.4% q-o-q to $2.27 psf, which the firm attributes to “better occupant understanding and pricing sensitivity within the prime private factory segment”.
Industrial properties with a lot longer tenures in Singapore are viewing greater demand, as global unpredictabilities prompt a flight to quality amongst occupants and investors, according to a study report by Savills Singapore.
In the rental market, overall leasing volume additionally regulated, with JTC rental data revealing a 1.2% q-o-q decline to 2,867 purchases in 1Q2026. At the same time, rental rate activities were blended, underscoring a more careful leasing market.
Because of this, Savills Singapore is forecasting total rental development throughout many industrial sections to continue to be secure this year. The firm is anticipating rental development for multiple-user factories and business parks ahead in between 0% and 2% in 2026, whilst warehouse and logistics rents are expected to expand between 0% and 1%.
Worths of 30-year leasehold industrial possessions monitor by Savills dropped 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lower cravings among financiers for such possessions. On the other hand, values of 60-year leasehold assets climbed up 1.4% q-o-q to $569 psf across the same period. Estate assets found even stronger development, with prices increasing 2.9% q-o-q to $876 psf.
Singapore industrial sales weakened last quarter, amid a more careful operating atmosphere. JTC Corp’s sales caution data shows that strata industrial sales fell 17.5% q-o-q to 335 offers, the most affordable quarterly volume since 2020, claims Savills. “The subdued turnover mirrors persisted purchaser selectiveness, with resources implementation greatly concentrated in assets providing stronger basics, longer-term value preservation, or operational benefits,” the record adds.
While transaction volume declined, Savills notes that need continues to be maintained for “well-positioned properties with a reasonable total worth quantum”. In particular, the firm highlights a clear shift in buyer preference towards industrial possessions with longer land tenures.
