Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Industrial properties with a lot longer tenures in Singapore are observing greater need, as global unpredictabilities prompt a flight to quality amongst tenants and investors, according to a research report by Savills Singapore.
Savills anticipates belief in the commercial market to remain cautious, as the Middle East conflict possibly evaluates on economic activity in the forthcoming months. Versus this background, financier and inhabitant demand are anticipated to remain careful, skewing in the direction of “modern, well-located and higher-specification assets,” claims Alan Cheong, executive director for research and consultancy at Savills Singapore.
Singapore industrial sales weakened last quarter, amidst a more cautious operating atmosphere. JTC Corp’s sales caveat information shows that strata commercial sales fell 17.5% q-o-q to 335 deals, the most affordable quarterly volume since 2020, claims Savills. “The restrained turn over mirrors persisted purchaser selectiveness, with funding release mostly focused in assets using stronger fundamentals, longer-term worth preservation, or functional benefits,” the record adds.
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While transaction volume declined, Savills keeps in mind that need remains sustained for “well-positioned assets with a sensible complete worth quantum”. Particularly, the firm highlights a clear change in purchaser preference in the direction of industrial possessions with longer land tenures.
” The more powerful efficiency of longer-tenure properties underscores a flight to quality and tenure protection, with capitalists increasingly prioritising possessions that offer greater long-term worth retention in an extra selective investment atmosphere,” the report discusses.
In the rental market, total leasing volume additionally regulated, with JTC rental data showing a 1.2% q-o-q decrease to 2,867 purchases in 1Q2026. Meanwhile, rental price activities were mixed, emphasizing an extra discerning leasing market.
Leas for Savills’ basket of prime stockroom and logistics possessions increased 0.4% q-o-q to $1.83 psf each month, sustained by resilient demand for high-quality logistics centers. 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 firm credits to “higher occupant understanding and prices level of sensitivity within the prime private factory segment”.
Values of 30-year leasehold industrial possessions tracked by Savills dropped 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lower cravings amongst investors for such properties. On the other hand, values of 60-year leasehold possessions climbed 1.4% q-o-q to $569 psf throughout the same duration. Property assets found also stronger growth, with costs rising 2.9% q-o-q to $876 psf.
Therefore, Savills Singapore is projecting general rental development across many industrial sections to continue to be secure this year. The company is anticipating rental growth for multiple-user factories and business parks ahead in between 0% and 2% in 2026, while warehouse and logistics rents are anticipated to expand between 0% and 1%.
