Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
Escalating tensions between the United States and China, noted by tolls and vindictive tariffs, are slowing global trade circulations, which Knight Frank anticipates to detrimentally influence Singapore’s manufacturing, electronic devices and logistics sectors. Currently, Singapore’s 2025 GDP projection has actually been downgraded, with the Ministry of Trade and Market lowering its quote previously this month to between 0% and 2%, down from 1% to 3%.
In spite of the recurring market turmoil, Knight Frank says bright areas remain for Singapore, offered its placement as an attractive and relied on investment and service center. “As United States President Trump’s current statement of the 10% toll imposed on Singapore goods imported in the US appears to be the international baseline floor (right now), producers may also consider expanding or moving last-stage production activities to Singapore,” the record adds.
This is anticipated to place a further drag out industrial property sales task, that has currently revealed a decrease ever since the last quarter of 2024. Data put together by Knight Frank show that total industrial sales worth fell by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing task additionally decreased, dropping 0.4% q-o-q to 3,008 rental transactions. The deals totaled up to $25.6 million in value, 1.1% reduced q-o-q.
Additionally, Singapore’s building market is poised to grow due to big tasks, consisting of Changi Airport Terminal 5 and the development of Marina Bay Sands. This, consequently, would certainly translate to more need for purpose-built dorm rooms, with business additionally progressively seeking to convert manufacturing facility area into dorm rooms, Knight Frank claims.
The report also emphasize JTC’s current enhancements to the industrial land lease structure. Reported in March, the improvements consist of offering an added 3 years of lease period for all brand-new greenfield industrial advancements to cover the structure and advancement period, and a brand-new system to enable eligible tenants on 20-year JTC rents to extend them by up to 2 tranches of five years.
In the industrial property market, Knight Frank anticipates the prompt effect of the business battle will be a reduction in transaction volume as buyers and occupiers relocate right into a form of pause. “Ongoing deals might be put on hold as impacted parties turn careful and wait for even more of the scenario to unfold,” the report sees.
“The existing wave of tax announcements and modifications in the days forward have actually produced and continue to develop heightened uncertainty that compel industrial players to adopt a mindful pose, affecting transfers and expansions,” notes Calvin Yeo, head of occupier strategy and solutions at Knight Frank Singapore.
Knight Frank has decreased its Singapore plant rental development forecast for 2025 to in between 0% and 2%, down from the 1% to 3% range anticipated previously. The lower forecast comes amid “stormy weather forward” for the commercial industry, the firm says in an April research review.
