Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
The report also emphasize JTC’s recent improvements to the industrial land lease framework. Announced in March, the improvements include offering an extra three years of lease tenure for all brand-new greenfield industrial advancements to cover the building and development duration, and a new system to enable qualified lessees on 20-year JTC leases to prolong them by approximately two tranches of five years.
In the industrial property industry, Knight Frank predicts the instant influence of the business war will be a decrease in operation quantity as buyers and occupiers relocate right into a form of pause. “Ongoing purchases could be postponed as impacted parties turn careful and wait for more of the circumstance to unfold,” the report checks out.
“The existing spate of tax statements and changes in the days ahead have developed and remain to produce increased unpredictability that oblige commercial players to embrace a cautious stance, affecting transfers and growths,” observes Calvin Yeo, head of occupier method and services at Knight Frank Singapore.
Knight Frank has minimized its Singapore factory rental growth forecast for 2025 to between 0% and 2%, down from the 1% to 3% range forecasted formerly. The lesser forecast comes amidst “stormy weather to come” for the industrial sector, the firm says in an April research review.
Intensifying pressures in between the US and China, marked by tariffs and vindictive tolls, are slowing global trade flows, that Knight Frank anticipates to detrimentally influence Singapore’s production, electronic devices and logistics sectors. Currently, Singapore’s 2025 GDP forecast has actually been reduced, with the Ministry of Trade and Industry reducing its estimate previously this month to in between 0% and 2%, down from 1% to 3%.
On top of that, Singapore’s building field is positioned to expand because of large projects, consisting of Changi Airport Terminal 5 and the growth of Marina Bay Sands. This, subsequently, would convert to more demand for purpose-built dorm rooms, with companies additionally increasingly looking for to convert factory area right into dorms, Knight Frank claims.
Regardless of the recurring market chaos, Knight Frank claims bright places remain for Singapore, given its setting as an appealing and trusted financial investment and business hub. “As United States President Trump’s current news of the 10% toll imposed on Singapore goods imported in the US appears to be the international baseline floor (right now), manufacturers could also take into consideration expanding or relocating last-stage manufacturing activities to Singapore,” the report adds.
This is expected to put a more drag on commercial property sales task, that has currently shown a decrease since the last quarter of 2024. Data assembled by Knight Frank indicate that overall industrial sales worth dropped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing activity also decreased, dropping 0.4% q-o-q to 3,008 rental deals. The deals totaled up to $25.6 million in value, 1.1% reduced q-o-q.
