Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
In the industrial realty market, Knight Frank predicts the instant effect of the trade battle will be a decrease in transaction quantity as buyers and occupiers relocate into a form of pause. “Ongoing deals could be put on hold as impacted parties turn cautious and await even more of the scenario to unfold,” the report sees.
This is assumed to place a more drag out commercial property sales task, which has currently shown a decline since the last quarter of 2024. Information put together by Knight Frank indicate that overall industrial sales value slipped 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 deals totaled up to $25.6 million in value, 1.1% reduced q-o-q.
The report also emphasize JTC’s current enhancements to the industrial land lease framework. Reported in March, the improvements consist of offering an added 3 years of lease tenure for all brand-new greenfield commercial growths to cover the structure and advancement period, and a brand-new plan to enable qualified tenants on 20-year JTC rents to expand them by as much as 2 tranches of 5 years.
Intensifying tensions between the US and China, marked by tolls and retaliatory tariffs, are reducing worldwide trade circulations, that Knight Frank anticipates to detrimentally influence Singapore’s manufacturing, electronic devices and logistics sectors. Already, Singapore’s 2025 GDP forecast has actually been downgraded, with the Ministry of Trade and Sector lowering its price quote earlier this month to between 0% and 2%, down from 1% to 3%.
“The existing spate of tariff announcements and changes in the days to come have developed and continue to develop increased uncertainty that compel industrial users to embrace a cautious position, influencing relocations and expansions,” notices Calvin Yeo, head of tenant technique and solutions at Knight Frank Singapore.
Knight Frank has reduced its Singapore factory lease development projection for 2025 to between 0% and 2%, down from the 1% to 3% range anticipated formerly. The lesser forecast comes amid “rainy weather forward” for the commercial industry, the firm claims in an April research review.
In addition, Singapore’s construction market is poised to expand because of large jobs, including Changi Airport Terminal 5 and the expansion of Marina Bay Sands. This, subsequently, would translate to even more need for purpose-built dormitories, with firms also significantly seeking to transform factory space into dorm rooms, Knight Frank claims.
Despite the ongoing market turmoil, Knight Frank claims rich areas stay for Singapore, offered its setting as an appealing and trusted financial investment and company hub. “As US Head of state Trump’s current announcement of the 10% tariff imposed on Singapore goods imported in the US seems the international baseline flooring (currently), producers could also think about increasing or moving last-stage production tasks to Singapore,” the report includes.
