Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Singapore industrial sales weakened last quarter, amid a much more careful operating environment. JTC Corp’s sales caution information shows that strata industrial sales dropped 17.5% q-o-q to 335 offers, the lowest quarterly volume since 2020, claims Savills. “The controlled turn over reflects persisted customer selectiveness, with resources release mainly focused in assets offering stronger fundamentals, longer-term worth conservation, or operational benefits,” the report includes.
” The stronger efficiency of longer-tenure possessions emphasizes a trip to quality and tenure protection, with capitalists progressively prioritising assets that provide higher long-lasting worth retention in a more careful investment setting,” the record discusses.
Worths of 30-year leasehold industrial assets monitor by Savills fell 0.6% q-o-q to $353 psf in 1Q2026, showing a lesser cravings among investors for such possessions. On the other hand, values of 60-year leasehold possessions climbed up 1.4% q-o-q to $569 psf across the same period. Property properties found also stronger development, with prices rising 2.9% q-o-q to $876 psf.
Industrial assets with a lot longer periods in Singapore are viewing greater need, as international unpredictabilities prompt a flight to quality amongst occupiers and investors, according to a study report by Savills Singapore.
In the rental market, overall leasing quantity likewise regulated, with JTC rental information revealing a 1.2% q-o-q decrease to 2,867 transactions in 1Q2026. On the other hand, rental rate movements were mixed, highlighting a much more careful leasing market.
While deal quantity decreased, Savills keeps in mind that need remains sustained for “well-positioned properties with an affordable complete worth quantum”. Specifically, the company highlights a clear change in buyer preference in the direction of commercial assets with longer land periods.
As a result, Savills Singapore is projecting total rental growth throughout the majority of industrial segments to continue to be steady this year. The company 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 in between 0% and 1%.
Rental fees for Savills’ basket of prime stockroom and logistics assets rose 0.4% q-o-q to $1.83 psf per month, supported by resilient demand for premium logistics facilities. On the other hand, rents for prime multiple-user warehouses tracked by Savills plunged by 1.4% q-o-q to $2.27 psf, which the company credits to “greater occupant selectivity and pricing sensitivity within the prime exclusive factory section”.
Savills expects sentiment in the commercial market to remain careful, as the Middle East problem possibly weighs on economic activity in the following months. Versus this backdrop, investor and occupier demand are anticipated to stay selective, skewing towards “modern, well-located and higher-specification assets,” claims Alan Cheong, executive director for research and working as a consultant at Savills Singapore.
