Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Rents for Savills’ basket of prime storage facility and logistics possessions climbed 0.4% q-o-q to $1.83 psf per month, supported by resilient need for premium logistics centers. On the other hand, rents for prime multiple-user factories tracked by Savills plunged by 1.4% q-o-q to $2.27 psf, which the company attributes to “greater occupant selectivity and rates level of sensitivity within the prime private factory sector”.
Singapore industrial sales weakened last quarter, amidst an extra careful operating atmosphere. JTC Corp’s sales caution information reveals that strata commercial sales fell 17.5% q-o-q to 335 deals, the most affordable quarterly volume since 2020, claims Savills. “The controlled turn over mirrors continued customer selectivity, with resources release greatly focused in assets providing more powerful basics, longer-term worth conservation, or functional advantages,” the report includes.
Worths of 30-year leasehold industrial possessions monitor by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, showing a lower cravings among investors for such assets. On the other hand, values of 60-year leasehold possessions climbed 1.4% q-o-q to $569 psf across the exact same duration. Estate properties found even stronger development, with rates increasing 2.9% q-o-q to $876 psf.
Savills expects sentiment in the commercial market to remain cautious, as the Middle East dispute potentially evaluates on economic action in the following months. Versus this background, capitalist and inhabitant demand are expected to remain selective, skewing towards “contemporary, well-located and higher-specification assets,” states Alan Cheong, executive director for research and working as a consultant at Savills Singapore.
While transaction quantity decreased, Savills keeps in mind that demand continues to be sustained for “well-positioned assets with a sensible total worth quantum”. In particular, the firm highlights a clear shift in customer preference in the direction of commercial properties with longer land tenures.
Industrial assets with longer periods in Singapore are viewing greater need, as worldwide uncertainties prompt a flight to quality amongst occupiers and investors, according to a study report by Savills Singapore.
” The stronger efficiency of longer-tenure possessions emphasizes a flight to quality and period protection, with capitalists increasingly prioritising possessions that offer higher long-lasting value retention in a more discerning financial investment environment,” the report discusses.
In the rental market, total leasing volume also moderated, with JTC rental data showing a 1.2% q-o-q decline to 2,867 purchases in 1Q2026. Meanwhile, rental rate motions were combined, emphasizing a more selective leasing market.
Consequently, Savills Singapore is predicting total rental growth throughout most commercial segments to remain secure this year. The company is forecasting 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 grow between 0% and 1%.
