Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Worths of 30-year leasehold industrial possessions tracing by Savills fell 0.6% q-o-q to $353 psf in 1Q2026, reflecting a lower hunger amongst capitalists for such properties. In contrast, worths of 60-year leasehold assets climbed 1.4% q-o-q to $569 psf across the exact same duration. Freehold assets spotted also stronger development, with rates increasing 2.9% q-o-q to $876 psf.
While deal quantity decreased, Savills keeps in mind that demand continues to be sustained for “well-positioned properties with a practical total worth quantum”. Specifically, the company highlights a clear shift in purchaser preference towards commercial assets with longer land tenures.
Rents for Savills’ basket of prime stockroom and logistics assets 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, rental fees for prime multiple-user warehouses tracked by Savills plunged by 1.4% q-o-q to $2.27 psf, which the company attributes to “better occupier perception and rates level of sensitivity within the prime private factory section”.
” The stronger performance of longer-tenure properties emphasizes a flight to quality and period security, with capitalists progressively prioritising possessions that use better long-lasting value retention in a much more discerning financial investment setting,” the record describes.
Savills anticipates sentiment in the industrial market to remain cautious, as the Middle East dispute potentially weighs on economic activity in the coming months. Versus this background, financier and inhabitant need are prepared for to stay discerning, skewing towards “modern, well-located and higher-specification assets,” claims Alan Cheong, executive director for research and working as a consultant at Savills Singapore.
Singapore industrial sales weakened last quarter, amid a much more cautious operating setting. JTC Corp’s sales caveat information reveals that strata industrial sales fell 17.5% q-o-q to 335 offers, the most affordable quarterly volume since 2020, says Savills. “The restrained turnover mirrors continued purchaser selectiveness, with capital implementation mostly concentrated in assets providing more powerful principles, longer-term value preservation, or operational benefits,” the record adds.
In the rental market, overall leasing quantity additionally regulated, with JTC rental information revealing a 1.2% q-o-q decline to 2,867 transactions in 1Q2026. At the same time, rental rate motions were blended, underscoring a more discerning leasing market.
Industrial properties with longer periods in Singapore are observing greater demand, as worldwide uncertainties prompt a flight to quality amongst tenants and investors, according to a study report by Savills Singapore.
Consequently, Savills Singapore is projecting general rental growth across many industrial segments to continue to be secure this year. The firm is anticipating rental growth for multiple-user factories and business parks ahead in between 0% and 2% in 2026, while warehouse and logistics rents are anticipated to grow between 0% and 1%.
