Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Rental fees for Savills’ basket of prime stockroom and logistics assets rose 0.4% q-o-q to $1.83 psf per month, supported by resilient need for top quality logistics centers. On the other hand, leas for prime multiple-user factories tracked by Savills dropped by 1.4% q-o-q to $2.27 psf, which the firm credits to “greater occupant understanding and pricing sensitivity within the prime private factory segment”.
Therefore, Savills Singapore is projecting general rental growth throughout the majority of industrial sectors to continue to be stable this year. The company is anticipating rental growth for multiple-user factories and business parks ahead in between 0% and 2% in 2026, whilst warehouse and logistics rents are expected to expand in between 0% and 1%.
While purchase quantity declined, Savills keeps in mind that need stays sustained for “well-positioned assets with a practical total worth quantum”. Particularly, the company highlights a clear change in customer choice towards industrial possessions with longer land periods.
Values of 30-year leasehold industrial possessions tracked by Savills dropped 0.6% q-o-q to $353 psf in 1Q2026, reflecting a lesser hunger among financiers for such possessions. On the other hand, values of 60-year leasehold properties climbed up 1.4% q-o-q to $569 psf throughout the very same period. Freehold properties saw also more powerful development, with costs rising 2.9% q-o-q to $876 psf.
Industrial properties with longer periods in Singapore are seeing higher demand, as global unpredictabilities prompt a flight to quality among tenants and investors, according to a study report by Savills Singapore.
Savills expects sentiment in the commercial market to continue to be mindful, as the Middle East problem possibly evaluates on economic activity in the forthcoming months. Versus this background, investor and inhabitant demand are prepared for to stay selective, skewing towards “contemporary, well-located and higher-specification assets,” says Alan Cheong, executive supervisor for research and working as a consultant at Savills Singapore.
” The stronger efficiency of longer-tenure assets highlights a flight to quality and tenure protection, with financiers progressively prioritising properties that supply better long-lasting worth retention in a more selective investment atmosphere,” the record discusses.
In the rental market, general leasing volume additionally moderated, with JTC rental data revealing a 1.2% q-o-q decrease to 2,867 deals in 1Q2026. On the other hand, rental price movements were mixed, highlighting a more discerning leasing market.
Singapore industrial sales weakened last quarter, amid a more cautious operating atmosphere. JTC Corp’s sales caution information reveals that strata commercial sales dropped 17.5% q-o-q to 335 offers, the most affordable quarterly volume since 2020, states Savills. “The controlled turn over mirrors continued customer selectiveness, with capital deployment largely focused in assets offering more powerful fundamentals, longer-term value conservation, or functional advantages,” the record adds.
