Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Industrial assets with a lot longer tenures in Singapore are viewing greater need, as worldwide uncertainties prompt a flight to quality among occupants and investors, according to a study report by Savills Singapore.
Therefore, Savills Singapore is projecting total rental growth across many commercial segments 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, whilst warehouse and logistics rents are expected to grow between 0% and 1%.
” The more powerful efficiency of longer-tenure properties emphasizes a trip to quality and tenure safety, with financiers significantly prioritising possessions that supply greater lasting value retention in an extra selective investment environment,” the report describes.
Values of 30-year leasehold industrial properties monitor by Savills fell 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lesser appetite among capitalists for such possessions. On the other hand, worths of 60-year leasehold possessions climbed 1.4% q-o-q to $569 psf throughout the exact same duration. Estate assets saw even stronger development, with costs increasing 2.9% q-o-q to $876 psf.
Savills expects view in the commercial market to remain cautious, as the Middle East dispute possibly weighs on economic activity in the coming months. Against this background, financier and inhabitant demand are expected to remain discerning, skewing towards “modern, well-located and higher-specification assets,” claims Alan Cheong, executive director for research and consultancy at Savills Singapore.
In the rental market, general leasing volume likewise moderated, with JTC rental information showing a 1.2% q-o-q decline to 2,867 deals in 1Q2026. Meanwhile, rental price motions were mixed, underscoring an extra careful leasing market.
While transaction quantity declined, Savills keeps in mind that demand remains maintained for “well-positioned assets with an affordable overall worth quantum”. Specifically, the company highlights a clear shift in buyer choice in the direction of commercial possessions with longer land periods.
Singapore industrial sales weakened last quarter, amid a much more cautious operating atmosphere. JTC Corp’s sales caution information shows that strata commercial sales fell 17.5% q-o-q to 335 deals, the most affordable quarterly volume since 2020, states Savills. “The controlled turnover reflects continued customer selectiveness, with funding release mostly focused in assets using stronger principles, longer-term worth preservation, or operational advantages,” the report adds.
Rental fees for Savills’ basket of prime warehouse and logistics properties increased 0.4% q-o-q to $1.83 psf each month, supported by durable need for top notch logistics centers. 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 firm credits to “greater occupier selectivity and prices sensitivity within the prime private factory sector”.
