Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Singapore industrial sales weakened last quarter, amidst a much more careful operating atmosphere. JTC Corp’s sales caution information reveals that strata industrial sales fell 17.5% q-o-q to 335 deals, the lowest quarterly volume since 2020, says Savills. “The restrained turnover reflects continued buyer selectivity, with funding deployment greatly concentrated in assets offering stronger fundamentals, longer-term value preservation, or functional advantages,” the record includes.
Consequently, Savills Singapore is predicting general rental development throughout a lot of industrial segments to remain steady this year. The company is forecasting rental growth for multiple-user factories and business parks to find in between 0% and 2% in 2026, whilst warehouse and logistics rents are expected to expand in between 0% and 1%.
While purchase volume dropped, Savills keeps in mind that need remains continued for “well-positioned properties with a sensible overall worth quantum”. Particularly, the company highlights a clear shift in buyer choice towards industrial assets with longer land tenures.
Savills expects belief in the industrial market to continue to be mindful, as the Middle East conflict potentially evaluates on economic action in the following months. Against this backdrop, investor and occupier demand are anticipated to stay selective, skewing towards “contemporary, well-located and higher-specification assets,” claims Alan Cheong, executive supervisor for research and working as a consultant at Savills Singapore.
Leas for Savills’ basket of prime stockroom and logistics assets climbed 0.4% q-o-q to $1.83 psf per month, supported by resistant need for top quality logistics centers. On the other hand, rental fees for prime multiple-user factories tracked by Savills dropped by 1.4% q-o-q to $2.27 psf, which the firm attributes to “higher occupant selectivity and pricing sensitivity within the prime exclusive factory sector”.
In the rental market, overall leasing quantity also moderated, with JTC rental data revealing a 1.2% q-o-q decrease to 2,867 transactions in 1Q2026. At the same time, rental price motions were blended, underscoring a more discerning leasing market.
” The stronger performance of longer-tenure possessions underscores a flight to quality and tenure security, with capitalists progressively prioritising assets that supply better long-term value retention in an extra selective investment setting,” the report discusses.
Values of 30-year leasehold commercial properties monitor by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, showing a lower hunger among capitalists for such properties. In contrast, values of 60-year leasehold assets climbed up 1.4% q-o-q to $569 psf throughout the same duration. Property properties spotted also stronger growth, with rates increasing 2.9% q-o-q to $876 psf.
Industrial assets with longer tenures in Singapore are seeing greater need, as global unpredictabilities prompt a flight to quality amongst tenants and investors, according to a study report by Savills Singapore.
