Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
In the commercial property market, Knight Frank predicts the instant impact of the trade war will be a decrease in transaction quantity as buyers and occupiers relocate right into a state of pause. “Ongoing purchases might be postponed as impacted parties transform cautious and wait on even more of the scenario to unravel,” the report checks out.
This is expected to put a more drag out industrial property sales activity, that has currently shown a decline ever since the last quarter of 2024. Data put together by Knight Frank indicate that complete industrial sales value dropped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing task also declined, dropping 0.4% q-o-q to 3,008 rental transactions. The purchases amounted to $25.6 million in value, 1.1% lower q-o-q.
Rising pressures between the US and China, noted by tolls and vindictive tariffs, are reducing global trade flows, that Knight Frank expects to detrimentally impact Singapore’s manufacturing, electronics and logistics sectors. Currently, Singapore’s 2025 GDP projection has been devalued, with the Ministry of Trade and Sector reducing its quote previously this month to between 0% and 2%, below 1% to 3%.
Knight Frank has minimized its Singapore factory rental development forecast for 2025 to in between 0% and 2%, down from the 1% to 3% range forecasted previously. The lower projection comes amid “stormy weather forward” for the commercial field, the firm says in an April research report.
In spite of the continuous market chaos, Knight Frank claims brilliant areas continue to be for Singapore, provided its placement as an attractive and relied on financial investment and business center. “As US President Trump’s recent statement of the 10% toll imposed on Singapore goods imported in the US seems the international baseline floor (currently), manufacturers could also take into consideration expanding or moving last-stage production activities to Singapore,” the report includes.
Additionally, Singapore’s building field is poised to expand as a result of big tasks, including Changi Airport Terminal 5 and the development of Marina Bay Sands. This, consequently, would certainly translate to even more need for purpose-built dorm rooms, with firms also progressively looking for to transform factory space into dormitories, Knight Frank claims.
“The current spate of tariff statements and changes in the days forward have actually produced and continue to create strengthened uncertainty that oblige industrial players to embrace a mindful pose, affecting relocations and developments,” notices Calvin Yeo, head of tenant approach and services at Knight Frank Singapore.
The report also highlights JTC’s current improvements to the industrial land lease structure. Declared in March, the improvements consist of giving an extra three years of lease period for all new greenfield industrial growths to cover the building and development duration, and a brand-new system to enable qualified tenants on 20-year JTC rents to expand them by as much as two tranches of five years.
