Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Savills expects sentiment in the industrial market to continue to be careful, as the Middle East problem possibly evaluates on economic action in the following months. Versus this background, capitalist and inhabitant demand are expected to remain careful, skewing towards “modern, well-located and higher-specification assets,” claims Alan Cheong, executive director for research and working as a consultant at Savills Singapore.
In the rental market, general leasing volume additionally regulated, with JTC rental information showing a 1.2% q-o-q decrease to 2,867 deals in 1Q2026. On the other hand, rental price motions were mixed, underscoring a more selective leasing market.
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Singapore industrial sales weakened last quarter, amid a much more cautious operating environment. JTC Corp’s sales caution information shows that strata industrial sales fell 17.5% q-o-q to 335 deals, the most affordable quarterly volume since 2020, claims Savills. “The controlled turnover reflects continued purchaser selectiveness, with capital release largely concentrated in assets supplying more powerful basics, longer-term value preservation, or functional advantages,” the report adds.
Values of 30-year leasehold industrial assets tracked by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lower hunger among financiers for such properties. In contrast, worths of 60-year leasehold properties climbed up 1.4% q-o-q to $569 psf throughout the very same period. Freehold properties saw even stronger development, with prices increasing 2.9% q-o-q to $876 psf.
While deal quantity dropped, Savills notes that demand continues to be continued for “well-positioned assets with a sensible overall value quantum”. Specifically, the company highlights a clear shift in purchaser choice in the direction of industrial properties with longer land tenures.
Rental fees for Savills’ basket of prime storage facility and logistics possessions rose 0.4% q-o-q to $1.83 psf per month, supported by resistant need for top notch 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 company attributes to “higher occupier selectivity and pricing sensitivity within the prime private factory sector”.
” The more powerful efficiency of longer-tenure possessions underscores a flight to quality and tenure safety and security, with financiers significantly prioritising possessions that supply better long-lasting value retention in an extra selective financial investment setting,” the report explains.
Therefore, Savills Singapore is predicting general rental development throughout many industrial sections to continue to be secure this year. The company is forecasting rental development for multiple-user factories and business parks to find in between 0% and 2% in 2026, whilst warehouse and logistics rents are anticipated to expand between 0% and 1%.
Industrial properties with longer tenures in Singapore are observing greater need, as global uncertainties prompt a flight to quality among tenants and investors, according to a study report by Savills Singapore.
