Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
Knight Frank has decreased its Singapore plant lease growth forecast for 2025 to between 0% and 2%, below the 1% to 3% range anticipated previously. The lower forecast comes in the middle of “stormy climate to come” for the industrial industry, the firm states in an April research credit report.
Despite the ongoing market turmoil, Knight Frank says rich places continue to be for Singapore, offered its placement as an eye-catching and relied on financial investment and organization hub. “As United States President Trump’s recent announcement of the 10% toll imposed on Singapore goods imported in the US seems the international baseline floor (at the moment), producers might also think about increasing or relocating last-stage production tasks to Singapore,” the record adds.
The report also highlights JTC’s recent enhancements to the industrial land lease framework. Announced in March, the enhancements include providing an added 3 years of lease period for all brand-new greenfield commercial advancements to cover the building and development duration, and a brand-new scheme to allow eligible lessees on 20-year JTC leases to extend them by approximately two tranches of five years.
Escalating stress in between the United States and China, marked by tariffs and vindictive tariffs, are slowing down global trade movements, that Knight Frank expects to detrimentally influence Singapore’s manufacturing, electronic devices and logistics sectors. Currently, Singapore’s 2025 GDP forecast has actually been downgraded, with the Ministry of Trade and Sector decreasing its price quote previously this month to in between 0% and 2%, down from 1% to 3%.
This is assumed to place a further drag on industrial property sales task, that has already shown a decline since the last quarter of 2024. Data put together by Knight Frank suggest that overall industrial sales value dropped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing activity also decreased, dropping 0.4% q-o-q to 3,008 rental deals. The transactions amounted to $25.6 million in value, 1.1% lower q-o-q.
“The current wave of tariff statements and changes in the days ahead have created and continue to produce heightened unpredictability that oblige commercial players to adopt a mindful position, affecting relocations and expansions,” observes Calvin Yeo, head of occupier technique and services at Knight Frank Singapore.
Additionally, Singapore’s construction sector is poised to grow because of big projects, including Changi Airport Terminal 5 and the growth of Marina Bay Sands. This, consequently, would certainly equate to even more need for purpose-built dorm rooms, with firms likewise increasingly seeking to transform factory room into dorm rooms, Knight Frank claims.
In the commercial real estate market, Knight Frank predicts the instant impact of the business battle will be a decrease in operation volume as buyers and occupiers move right into a form of pause. “Ongoing transactions could be put on hold as influenced parties transform cautious and wait on even more of the scenario to unravel,” the report sees.
