Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Singapore industrial sales weakened last quarter, amidst an extra mindful operating environment. JTC Corp’s sales caution information reveals that strata industrial sales fell 17.5% q-o-q to 335 offers, the most affordable quarterly volume since 2020, states Savills. “The subdued turn over mirrors persisted customer selectivity, with funding implementation greatly focused in assets offering stronger principles, longer-term worth conservation, or operational benefits,” the record adds.
In the rental market, total leasing volume additionally regulated, with JTC rental data revealing a 1.2% q-o-q decrease to 2,867 deals in 1Q2026. Meanwhile, rental price activities were combined, emphasizing a more selective leasing market.
” The stronger efficiency of longer-tenure possessions underscores a trip to quality and tenure safety, with capitalists increasingly prioritising possessions that use greater long-lasting value retention in a more selective investment setting,” the report clarifies.
While transaction volume declined, Savills keeps in mind that demand continues to be sustained for “well-positioned assets with a reasonable overall worth quantum”. Particularly, the company highlights a clear change in purchaser preference towards industrial properties with longer land periods.
Consequently, Savills Singapore is predicting overall rental growth throughout most industrial sections 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, whilst warehouse and logistics rents are expected to grow between 0% and 1%.
Worths of 30-year leasehold industrial possessions monitor 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 assets climbed up 1.4% q-o-q to $569 psf across the exact same period. Estate assets found even stronger growth, with prices increasing 2.9% q-o-q to $876 psf.
Rental fees for Savills’ basket of prime stockroom and logistics assets increased 0.4% q-o-q to $1.83 psf per month, sustained by resilient need for high-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 company attributes to “better occupier perception and prices sensitivity within the prime exclusive factory section”.
Savills expects sentiment in the commercial market to continue to be cautious, as the Middle East dispute possibly weighs on economic action in the forthcoming months. Against this background, financier and occupier need are prepared for to remain selective, skewing in the direction of “contemporary, well-located and higher-specification assets,” claims Alan Cheong, executive director for research and consultancy at Savills Singapore.
Industrial assets with longer periods in Singapore are seeing higher demand, as international uncertainties prompt a flight to quality among occupiers and investors, according to a research report by Savills Singapore.
