Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
In the rental market, general leasing quantity also regulated, with JTC rental information showing a 1.2% q-o-q decrease to 2,867 purchases in 1Q2026. Meanwhile, rental price activities were mixed, highlighting a much more discerning leasing market.
Rental fees for Savills’ basket of prime storage facility and logistics possessions climbed 0.4% q-o-q to $1.83 psf each month, supported by durable need for top quality logistics facilities. On the other hand, rental fees for prime multiple-user warehouses tracked by Savills dropped by 1.4% q-o-q to $2.27 psf, which the company attributes to “greater occupier perception and rates sensitivity within the prime private factory segment”.
Savills anticipates belief in the industrial market to continue to be mindful, as the Middle East conflict potentially weighs on economic action in the following months. Versus this backdrop, financier and occupier demand are expected to stay selective, skewing in the direction of “modern, well-located and higher-specification assets,” says Alan Cheong, executive director for research and working as a consultant at Savills Singapore.
While transaction volume decreased, Savills notes that need remains continued for “well-positioned assets with a reasonable complete worth quantum”. Particularly, the company highlights a clear shift in customer preference in the direction of commercial possessions with longer land tenures.
Industrial properties with longer periods in Singapore are viewing greater demand, as global unpredictabilities prompt a flight to quality among occupants and investors, according to a study report by Savills Singapore.
” The stronger efficiency of longer-tenure possessions highlights a trip to quality and period safety, with investors increasingly prioritising possessions that offer higher lasting worth retention in an extra discerning investment setting,” the record describes.
Values of 30-year leasehold commercial possessions tracing by Savills fell 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lesser appetite among financiers for such properties. On the other hand, values of 60-year leasehold possessions climbed up 1.4% q-o-q to $569 psf across the exact same duration. Estate assets saw even more powerful growth, with rates increasing 2.9% q-o-q to $876 psf.
Because of this, Savills Singapore is projecting overall rental growth across many industrial sections to continue to be stable this year. The company is anticipating rental development for multiple-user factories and business parks ahead in between 0% and 2% in 2026, while warehouse and logistics rents are anticipated to expand between 0% and 1%.
Singapore industrial sales weakened last quarter, amid a much more cautious operating environment. JTC Corp’s sales caution information reveals that strata commercial sales dropped 17.5% q-o-q to 335 offers, the most affordable quarterly volume since 2020, says Savills. “The restrained turn over shows continued purchaser selectiveness, with capital deployment mainly concentrated in assets using stronger principles, longer-term value preservation, or operational advantages,” the record includes.
