Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Industrial properties with a lot longer periods in Singapore are viewing higher need, as global unpredictabilities prompt a flight to quality amongst tenants and investors, according to a research report by Savills Singapore.
Values of 30-year leasehold industrial assets tracked by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, reflecting a lesser hunger amongst financiers for such possessions. In contrast, values of 60-year leasehold possessions climbed up 1.4% q-o-q to $569 psf throughout the very same duration. Estate assets spotted even more powerful growth, with prices rising 2.9% q-o-q to $876 psf.
” The more powerful efficiency of longer-tenure properties emphasizes a trip to quality and tenure security, with investors significantly prioritising possessions that provide higher long-term value retention in a much more selective investment setting,” the report clarifies.
Savills expects view in the commercial market to remain cautious, as the Middle East problem potentially evaluates on economic action in the following months. Versus this backdrop, financier and occupier demand are expected to stay discerning, skewing in the direction of “modern, well-located and higher-specification assets,” says Alan Cheong, executive supervisor for research and consultancy at Savills Singapore.
In the rental market, overall leasing volume additionally regulated, with JTC rental information showing a 1.2% q-o-q decline to 2,867 purchases in 1Q2026. At the same time, rental price movements were blended, underscoring a more discerning leasing market.
While deal quantity decreased, Savills notes that need stays maintained for “well-positioned assets with an affordable total worth quantum”. In particular, the firm highlights a clear shift in customer choice in the direction of commercial properties with longer land tenures.
Rental fees for Savills’ basket of prime storehouse and logistics properties rose 0.4% q-o-q to $1.83 psf per month, sustained by resilient need for high-quality logistics centers. On the other hand, leas for prime multiple-user manufacturing facilities tracked by Savills fell by 1.4% q-o-q to $2.27 psf, which the firm credits to “greater occupier understanding and rates level of sensitivity within the prime exclusive factory section”.
As a result, Savills Singapore is forecasting general rental development across the majority of commercial sectors to remain steady this year. The firm is forecasting rental development for multiple-user factories and business parks to find in between 0% and 2% in 2026, while warehouse and logistics rents are expected to expand in between 0% and 1%.
Singapore industrial sales weakened last quarter, amidst an extra cautious operating environment. JTC Corp’s sales caution information shows that strata industrial sales dropped 17.5% q-o-q to 335 offers, the lowest quarterly volume since 2020, claims Savills. “The restrained turn over shows continued buyer selectiveness, with capital release mostly concentrated in assets providing stronger fundamentals, longer-term worth conservation, or functional benefits,” the report includes.
