Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Singapore industrial sales weakened last quarter, amid a more mindful operating atmosphere. JTC Corp’s sales caution data reveals that strata industrial sales fell 17.5% q-o-q to 335 deals, the most affordable quarterly volume since 2020, states Savills. “The restrained turnover mirrors persisted customer selectiveness, with funding implementation mostly concentrated in assets offering more powerful basics, longer-term worth preservation, or operational benefits,” the record adds.
Savills anticipates sentiment in the industrial market to continue to be mindful, as the Middle East dispute possibly evaluates on economic action in the forthcoming months. Versus this background, investor and occupier need are prepared for to remain discerning, skewing in the direction of “modern, well-located and higher-specification assets,” says Alan Cheong, executive director for research and consultancy at Savills Singapore.
Therefore, Savills Singapore is projecting total rental growth across many commercial sections to remain steady this year. The firm is anticipating rental growth for multiple-user factories and business parks to come in between 0% and 2% in 2026, while warehouse and logistics rents are expected to expand in between 0% and 1%.
Rental fees for Savills’ basket of prime stockroom and logistics properties rose 0.4% q-o-q to $1.83 psf per month, supported by durable need for high-quality logistics facilities. 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 “better occupant selectivity and rates sensitivity within the prime private factory segment”.
Worths of 30-year leasehold industrial assets monitor by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lower appetite among financiers for such possessions. On the other hand, worths of 60-year leasehold assets climbed 1.4% q-o-q to $569 psf throughout the same duration. Property assets spotted even more powerful growth, with rates rising 2.9% q-o-q to $876 psf.
” The stronger efficiency of longer-tenure properties underscores a trip to quality and tenure safety and security, with investors increasingly prioritising properties that use better long-lasting worth retention in an extra selective financial investment setting,” the record explains.
Industrial assets with a lot longer tenures in Singapore are seeing greater need, as international uncertainties prompt a flight to quality among tenants and investors, according to a study report by Savills Singapore.
While deal volume decreased, Savills keeps in mind that need continues to be maintained for “well-positioned properties with a practical overall value quantum”. In particular, the firm highlights a clear shift in purchaser preference towards commercial assets with longer land periods.
In the rental market, general leasing volume additionally moderated, with JTC rental information showing a 1.2% q-o-q decline to 2,867 deals in 1Q2026. Meanwhile, rental price movements were combined, highlighting a much more selective leasing market.
