Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Singapore industrial sales weakened last quarter, amidst a much more mindful operating environment. JTC Corp’s sales caveat data shows that strata industrial sales fell 17.5% q-o-q to 335 deals, the most affordable quarterly volume since 2020, says Savills. “The controlled turn over reflects persisted customer selectiveness, with capital implementation greatly focused in assets supplying more powerful fundamentals, longer-term worth conservation, or operational advantages,” the record adds.
Rental fees for Savills’ basket of prime stockroom and logistics properties rose 0.4% q-o-q to $1.83 psf monthly, sustained by durable need for top notch logistics centers. 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 company credits to “better occupier perception and pricing sensitivity within the prime exclusive factory section”.
Worths of 30-year leasehold commercial properties tracing by Savills fell 0.6% q-o-q to $353 psf in 1Q2026, showing a lesser cravings among investors for such possessions. On the other hand, worths of 60-year leasehold possessions climbed up 1.4% q-o-q to $569 psf throughout the very same duration. Freehold assets found also more powerful growth, with costs rising 2.9% q-o-q to $876 psf.
In the rental market, general leasing volume likewise moderated, with JTC rental information revealing a 1.2% q-o-q decline to 2,867 purchases in 1Q2026. On the other hand, rental rate motions were mixed, highlighting an extra careful leasing market.
Industrial properties with longer periods in Singapore are observing higher demand, as global unpredictabilities prompt a flight to quality amongst occupants and investors, according to a research report by Savills Singapore.
” The more powerful performance of longer-tenure assets underscores a flight to quality and tenure security, with financiers significantly prioritising possessions that supply higher long-lasting value retention in a much more discerning investment atmosphere,” the record explains.
Savills anticipates belief in the commercial market to remain cautious, as the Middle East dispute potentially weighs on economic activity in the coming months. Against this backdrop, capitalist and occupier demand are expected to remain selective, skewing towards “modern, well-located and higher-specification assets,” states Alan Cheong, executive director for research and working as a consultant at Savills Singapore.
While transaction volume dropped, Savills notes that need remains maintained for “well-positioned properties with a sensible overall worth quantum”. In particular, the firm highlights a clear change in purchaser preference towards commercial assets with longer land periods.
Consequently, Savills Singapore is predicting overall rental development across a lot of industrial sectors to remain secure this year. The company is forecasting rental growth for multiple-user factories and business parks ahead in between 0% and 2% in 2026, while warehouse and logistics rents are expected to grow in between 0% and 1%.
