Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Singapore industrial sales weakened last quarter, amid an extra cautious operating atmosphere. JTC Corp’s sales caveat information shows that strata industrial sales dropped 17.5% q-o-q to 335 deals, the most affordable quarterly volume since 2020, claims Savills. “The subdued turnover shows continued buyer selectiveness, with capital implementation mainly focused in assets providing more powerful principles, longer-term value conservation, or functional benefits,” the record includes.
Values of 30-year leasehold commercial possessions tracked by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, showing a lesser hunger among capitalists for such properties. In contrast, values of 60-year leasehold possessions climbed 1.4% q-o-q to $569 psf throughout the very same duration. Estate assets saw also more powerful growth, with costs increasing 2.9% q-o-q to $876 psf.
Because of this, Savills Singapore is projecting general rental growth across many commercial sections to remain stable this year. The company is forecasting rental growth for multiple-user factories and business parks to find in between 0% and 2% in 2026, whilst warehouse and logistics rents are expected to grow in between 0% and 1%.
While purchase quantity declined, Savills notes that demand stays maintained for “well-positioned assets with a practical total worth quantum”. In particular, the firm highlights a clear shift in customer choice in the direction of commercial properties with longer land tenures.
” The more powerful performance of longer-tenure possessions emphasizes a trip to quality and tenure safety, with capitalists progressively prioritising properties that offer greater lasting worth retention in an extra careful investment atmosphere,” the report discusses.
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Rents for Savills’ basket of prime stockroom and logistics possessions climbed 0.4% q-o-q to $1.83 psf monthly, sustained by resilient need for premium logistics centers. On the other hand, rental fees for prime multiple-user factories tracked by Savills dropped by 1.4% q-o-q to $2.27 psf, which the firm attributes to “better occupant perception and prices sensitivity within the prime exclusive factory section”.
Industrial assets with longer periods in Singapore are viewing greater demand, as worldwide uncertainties prompt a flight to quality among occupiers and investors, according to a study report by Savills Singapore.
Savills expects belief in the commercial market to continue to be careful, as the Middle East dispute possibly evaluates on economic event in the forthcoming months. Versus this backdrop, investor and inhabitant need are expected to stay careful, skewing in the direction of “contemporary, well-located and higher-specification assets,” states Alan Cheong, executive supervisor for research and working as a consultant at Savills Singapore.
In the rental market, total leasing volume also regulated, with JTC rental information showing a 1.2% q-o-q decrease to 2,867 transactions in 1Q2026. On the other hand, rental price activities were blended, highlighting a more selective leasing market.
