Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
In the rental market, general leasing quantity also regulated, with JTC rental information showing a 1.2% q-o-q decline to 2,867 deals in 1Q2026. On the other hand, rental rate movements were mixed, highlighting an extra discerning leasing market.
Singapore industrial sales weakened last quarter, amidst a much more careful operating atmosphere. JTC Corp’s sales caution information shows that strata industrial sales dropped 17.5% q-o-q to 335 offers, the lowest quarterly volume since 2020, claims Savills. “The restrained turnover shows persisted buyer selectivity, with capital implementation greatly concentrated in assets offering more powerful principles, longer-term value conservation, or functional benefits,” the report includes.
Industrial properties with a lot longer periods in Singapore are seeing greater demand, as global uncertainties prompt a flight to quality amongst occupants and investors, according to a study report by Savills Singapore.
Because of this, Savills Singapore is projecting general rental development across a lot of industrial sections to continue to be stable 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 anticipated to grow in between 0% and 1%.
Savills anticipates sentiment in the industrial market to remain mindful, as the Middle East problem potentially weighs on economic action in the following months. Against this backdrop, investor and occupier demand are prepared for to remain careful, skewing towards “modern, well-located and higher-specification assets,” says Alan Cheong, executive supervisor for research and working as a consultant at Savills Singapore.
” The more powerful efficiency of longer-tenure assets highlights a trip to quality and period security, with capitalists progressively prioritising properties that provide higher lasting worth retention in a more selective financial investment atmosphere,” the report clarifies.
Rents for Savills’ basket of prime warehouse and logistics possessions rose 0.4% q-o-q to $1.83 psf per month, sustained by durable need for high-quality logistics facilities. On the other hand, rents for prime multiple-user factories tracked by Savills dropped by 1.4% q-o-q to $2.27 psf, which the firm attributes to “higher occupier understanding and rates sensitivity within the prime exclusive factory sector”.
Values of 30-year leasehold industrial possessions tracing by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lesser cravings among investors for such assets. On the other hand, values of 60-year leasehold properties climbed up 1.4% q-o-q to $569 psf throughout the exact same period. Estate properties found even more powerful growth, with prices rising 2.9% q-o-q to $876 psf.
While deal quantity decreased, Savills keeps in mind that need remains continued for “well-positioned assets with an affordable complete value quantum”. Particularly, the company highlights a clear shift in buyer preference in the direction of commercial assets with longer land tenures.
