Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Values of 30-year leasehold industrial possessions tracked by Savills dropped 0.6% q-o-q to $353 psf in 1Q2026, reflecting a lower hunger among financiers for such properties. In contrast, values of 60-year leasehold assets climbed 1.4% q-o-q to $569 psf throughout the exact same period. Freehold properties spotted also more powerful growth, with rates rising 2.9% q-o-q to $876 psf.
Singapore industrial sales weakened last quarter, amid a much more careful operating environment. JTC Corp’s sales caution data reveals that strata commercial sales fell 17.5% q-o-q to 335 offers, the most affordable quarterly volume since 2020, says Savills. “The restrained turnover shows continued purchaser selectiveness, with funding deployment mostly concentrated in assets supplying stronger principles, longer-term value preservation, or functional benefits,” the report includes.
In the rental market, overall leasing quantity also moderated, with JTC rental data showing a 1.2% q-o-q decrease to 2,867 purchases in 1Q2026. Meanwhile, rental rate movements were mixed, underscoring a much more discerning leasing market.
Savills anticipates sentiment in the commercial market to stay cautious, as the Middle East problem potentially weighs on economic event in the forthcoming months. Versus this backdrop, capitalist and inhabitant need are expected to stay selective, skewing towards “contemporary, well-located and higher-specification assets,” claims Alan Cheong, executive supervisor for research and consultancy at Savills Singapore.
Leas for Savills’ basket of prime warehouse and logistics properties climbed 0.4% q-o-q to $1.83 psf each month, sustained by resilient demand for top quality logistics facilities. On the other hand, rents for prime multiple-user manufacturing facilities tracked by Savills fell by 1.4% q-o-q to $2.27 psf, which the company attributes to “higher occupier perception and prices sensitivity within the prime exclusive factory segment”.
Therefore, Savills Singapore is predicting general rental development across many industrial sectors to remain stable this year. The company is anticipating rental growth for multiple-user factories and business parks to find in between 0% and 2% in 2026, while warehouse and logistics rents are anticipated to expand in between 0% and 1%.
While purchase volume declined, Savills notes that need stays continued for “well-positioned properties with a practical complete value quantum”. In particular, the company highlights a clear change in buyer choice in the direction of industrial assets with longer land periods.
Industrial assets with a lot longer periods in Singapore are observing greater need, as international uncertainties prompt a flight to quality among tenants and investors, according to a study report by Savills Singapore.
” The more powerful efficiency of longer-tenure properties emphasizes a flight to quality and period security, with capitalists progressively prioritising possessions that supply higher lasting worth retention in a more selective financial investment atmosphere,” the report clarifies.
