Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
The report also highlights JTC’s current improvements to the industrial land lease framework. Announced in March, the improvements consist of giving an additional 3 years of lease period for all new greenfield commercial advancements to cover the structure and development period, and a brand-new scheme to allow eligible tenants on 20-year JTC leases to prolong them by up to two tranches of 5 years.
In the industrial realty industry, Knight Frank predicts the instant impact of the trade war will be a decrease in operation volume as buyers and occupiers relocate into a state of pause. “Recurring deals might be postponed as impacted parties transform careful and wait on more of the scenario to unfold,” the report checks out.
Furthermore, Singapore’s building field is poised to grow because of large projects, consisting of Changi Airport Terminal 5 and the growth of Marina Bay Sands. This, consequently, would certainly translate to even more demand for purpose-built dormitories, with companies likewise progressively seeking to convert manufacturing facility area into dormitories, Knight Frank claims.
“The existing spate of tax statements and changes in the days to come have actually produced and continue to produce heightened uncertainty that oblige industrial users to take on a mindful pose, affecting movings and expansions,” notices Calvin Yeo, head of tenant approach and solutions at Knight Frank Singapore.
Intensifying stress between the United States and China, marked by tariffs and retaliatory tolls, are slowing global trade movements, which Knight Frank anticipates to detrimentally affect Singapore’s manufacturing, electronics and logistics sectors. Currently, Singapore’s 2025 GDP projection has been devalued, with the Ministry of Trade and Market lowering its price quote earlier this month to between 0% and 2%, below 1% to 3%.
This is expected to place a further drag on commercial property sales task, that has currently revealed a decline ever since the last quarter of 2024. Information compiled by Knight Frank indicate that complete industrial sales worth slipped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing activity also decreased, dropping 0.4% q-o-q to 3,008 rental transactions. The purchases totaled up to $25.6 million in value, 1.1% reduced q-o-q.
In spite of the continuous market turmoil, Knight Frank claims bright places continue to be for Singapore, offered its position as an attractive and relied on financial investment and service hub. “As United States Head of state Trump’s current announcement of the 10% tariff imposed on Singapore goods imported in the US appears to be the international standard flooring (right now), manufacturers may also think about increasing or relocating last-stage manufacturing tasks to Singapore,” the report adds.
Knight Frank has minimized its Singapore plant lease development projection for 2025 to between 0% and 2%, down from the 1% to 3% range predicted formerly. The lesser forecast comes amidst “rainy weather ahead” for the commercial field, the firm states in an April research report.
