Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
The report also emphasize JTC’s current enhancements to the commercial land lease structure. Declared in March, the enhancements include giving an extra three years of lease tenure for all brand-new greenfield commercial developments to cover the building and advancement duration, and a brand-new plan to allow qualified tenants on 20-year JTC rents to extend them by as much as 2 tranches of five years.
Escalating stress between the US and China, noted by tolls and vindictive tariffs, are slowing global trade movements, that Knight Frank anticipates to detrimentally affect Singapore’s manufacturing, electronic devices and logistics sectors. Already, Singapore’s 2025 GDP forecast has been reduced, with the Ministry of Trade and Industry lowering its quote previously this month to in between 0% and 2%, below 1% to 3%.
Despite the continuous market chaos, Knight Frank claims brilliant places continue to be for Singapore, given its placement as an appealing and relied on investment and service hub. “As United States President Trump’s current announcement of the 10% toll imposed on Singapore goods imported in the US appears to be the international standard floor (currently), manufacturers may also consider broadening or relocating last-stage production tasks to Singapore,” the report adds.
Additionally, Singapore’s building field is positioned to expand as a result of big jobs, consisting of Changi Airport Terminal 5 and the expansion of Marina Bay Sands. This, in turn, would certainly translate to more need for purpose-built dormitories, with firms additionally significantly looking for to convert manufacturing facility space into dorms, Knight Frank states.
Knight Frank has decreased its Singapore plant rental development projection for 2025 to between 0% and 2%, below the 1% to 3% range anticipated previously. The lesser projection comes amidst “stormy weather ahead” for the commercial sector, the firm claims in an April research report.
This is assumed to put a further drag on commercial property sales activity, that has currently shown a decrease since the last quarter of 2024. Data put together by Knight Frank suggest that complete industrial sales value dropped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing task additionally decreased, falling 0.4% q-o-q to 3,008 rental deals. The transactions amounted to $25.6 million in value, 1.1% reduced q-o-q.
In the commercial realty market, Knight Frank anticipates the instant impact of the business war will be a decrease in operation volume as buyers and occupiers move right into a form of pause. “Continuous transactions might be put on hold as influenced parties transform cautious and wait on more of the situation to unravel,” the report sees.
“The existing wave of tax announcements and adjustments in the days forward have developed and continue to create heightened uncertainty that oblige industrial players to take on a careful pose, affecting movings and growths,” notes Calvin Yeo, head of occupier strategy and services at Knight Frank Singapore.
