Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Industrial properties with longer tenures in Singapore are seeing higher need, as international unpredictabilities prompt a flight to quality amongst occupants and investors, according to a study report by Savills Singapore.
” The stronger performance of longer-tenure possessions highlights a trip to quality and period safety, with financiers significantly prioritising possessions that use greater long-lasting value retention in a more careful financial investment environment,” the report clarifies.
Rents for Savills’ basket of prime storage facility and logistics assets climbed 0.4% q-o-q to $1.83 psf each month, supported by resilient need for premium logistics facilities. On the other hand, rents for prime multiple-user manufacturing facilities tracked by Savills plunged by 1.4% q-o-q to $2.27 psf, which the company credits to “higher occupant selectivity and prices level of sensitivity within the prime exclusive factory segment”.
As a result, Savills Singapore is predicting general rental development throughout many industrial segments to remain steady this year. The firm is anticipating rental development for multiple-user factories and business parks to come in between 0% and 2% in 2026, while warehouse and logistics rents are anticipated to expand between 0% and 1%.
Singapore industrial sales weakened last quarter, amidst an extra mindful operating environment. JTC Corp’s sales caveat data reveals that strata industrial sales fell 17.5% q-o-q to 335 deals, the lowest quarterly volume since 2020, says Savills. “The controlled turn over mirrors persisted purchaser selectivity, with capital implementation mostly concentrated in assets using stronger basics, longer-term worth conservation, or operational benefits,” the record includes.
While deal volume decreased, Savills keeps in mind that demand continues to be maintained for “well-positioned assets with a practical total value quantum”. Particularly, the company highlights a clear change in buyer preference towards commercial properties with longer land periods.
Values of 30-year leasehold industrial properties tracked by Savills dropped 0.6% q-o-q to $353 psf in 1Q2026, showing a lesser appetite among capitalists for such assets. On the other hand, values of 60-year leasehold properties climbed 1.4% q-o-q to $569 psf across the exact same duration. Estate properties saw even stronger growth, with prices increasing 2.9% q-o-q to $876 psf.
In the rental market, total leasing quantity likewise moderated, with JTC rental data revealing a 1.2% q-o-q decrease to 2,867 purchases in 1Q2026. On the other hand, rental price activities were blended, underscoring a more careful leasing market.
Savills anticipates sentiment in the industrial market to continue to be cautious, as the Middle East problem potentially evaluates on economic activity in the following months. Against this background, financier and occupier demand are expected to stay discerning, skewing in the direction of “contemporary, well-located and higher-specification assets,” claims Alan Cheong, executive supervisor for research and working as a consultant at Savills Singapore.
