Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Singapore industrial sales weakened last quarter, amid a much more mindful operating environment. JTC Corp’s sales caution data shows that strata commercial sales dropped 17.5% q-o-q to 335 deals, the lowest quarterly volume since 2020, claims Savills. “The restrained turnover reflects continued buyer selectiveness, with resources release largely concentrated in assets using stronger basics, longer-term worth conservation, or operational advantages,” the record includes.
Worths of 30-year leasehold industrial possessions monitor by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lower appetite amongst capitalists for such assets. On the other hand, values of 60-year leasehold assets climbed 1.4% q-o-q to $569 psf across the very same period. Property assets found also stronger development, with prices increasing 2.9% q-o-q to $876 psf.
While deal quantity dropped, Savills notes that need continues to be continued for “well-positioned properties with an affordable total worth quantum”. In particular, the company highlights a clear change in buyer preference in the direction of industrial assets with longer land tenures.
” The stronger efficiency of longer-tenure assets underscores a flight to quality and tenure safety, with capitalists progressively prioritising possessions that offer better lasting worth retention in an extra careful investment setting,” the report clarifies.
Industrial assets with a lot longer periods in Singapore are seeing higher need, as international uncertainties prompt a flight to quality amongst occupants and investors, according to a research report by Savills Singapore.
As a result, Savills Singapore is projecting general rental growth across most commercial sectors to stay secure this year. The company is forecasting rental development for multiple-user factories and business parks to find in between 0% and 2% in 2026, while warehouse and logistics rents are expected to grow between 0% and 1%.
Rents for Savills’ basket of prime stockroom and logistics possessions climbed 0.4% q-o-q to $1.83 psf per month, supported by resilient need for top notch logistics centers. On the other hand, rents for prime multiple-user factories tracked by Savills plunged 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”.
Savills anticipates view in the industrial market to stay cautious, as the Middle East conflict potentially evaluates on economic event in the coming months. Against this backdrop, investor and inhabitant demand are expected to stay selective, skewing in the direction of “contemporary, well-located and higher-specification assets,” claims Alan Cheong, executive supervisor for research and consultancy at Savills Singapore.
In the rental market, general leasing quantity also moderated, with JTC rental data revealing a 1.2% q-o-q decline to 2,867 purchases in 1Q2026. On the other hand, rental rate activities were combined, emphasizing an extra selective leasing market.
