Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Rental fees for Savills’ basket of prime storage facility and logistics possessions climbed 0.4% q-o-q to $1.83 psf per month, sustained by durable demand for top quality logistics centers. On the other hand, rental fees for prime multiple-user factories tracked by Savills fell by 1.4% q-o-q to $2.27 psf, which the firm attributes to “greater occupier understanding and rates sensitivity within the prime private factory segment”.
Savills expects view in the commercial market to remain cautious, as the Middle East dispute possibly weighs on economic event in the forthcoming months. Versus this background, investor and inhabitant need are expected to remain selective, skewing in the direction of “contemporary, well-located and higher-specification assets,” claims Alan Cheong, executive supervisor for research and consultancy at Savills Singapore.
In the rental market, general leasing volume likewise moderated, with JTC rental data showing a 1.2% q-o-q decline to 2,867 transactions in 1Q2026. At the same time, rental price movements were combined, emphasizing an extra discerning leasing market.
As a result, Savills Singapore is projecting general rental growth throughout most industrial sectors to remain secure this year. The company is anticipating rental growth for multiple-user factories and business parks ahead in between 0% and 2% in 2026, while warehouse and logistics rents are anticipated to expand in between 0% and 1%.
” The stronger efficiency of longer-tenure possessions highlights a trip to quality and tenure protection, with financiers increasingly prioritising possessions that provide better long-lasting value retention in an extra discerning financial investment setting,” the record clarifies.
Industrial properties with a lot longer tenures in Singapore are seeing higher demand, as global unpredictabilities prompt a flight to quality among occupants and investors, according to a study report by Savills Singapore.
While purchase volume declined, Savills notes that need continues to be sustained for “well-positioned properties with an affordable total value quantum”. Particularly, the company highlights a clear shift in purchaser choice towards industrial possessions with longer land tenures.
Singapore industrial sales weakened last quarter, amid a much more mindful operating atmosphere. JTC Corp’s sales caution data reveals that strata commercial sales dropped 17.5% q-o-q to 335 offers, the lowest quarterly volume since 2020, claims Savills. “The controlled turn over mirrors persisted purchaser selectivity, with capital release largely focused in assets supplying stronger fundamentals, longer-term value preservation, or functional advantages,” the record includes.
Values of 30-year leasehold commercial properties tracked by Savills dropped 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lesser appetite amongst financiers for such possessions. In contrast, values of 60-year leasehold properties climbed 1.4% q-o-q to $569 psf across the exact same period. Freehold assets found even stronger development, with prices rising 2.9% q-o-q to $876 psf.
