Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Values of 30-year leasehold industrial possessions monitor by Savills fell 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lower appetite amongst capitalists for such assets. In contrast, values of 60-year leasehold properties climbed 1.4% q-o-q to $569 psf across the very same duration. Freehold assets found also more powerful growth, with costs rising 2.9% q-o-q to $876 psf.
” The more powerful efficiency of longer-tenure assets highlights a flight to quality and tenure safety, with capitalists increasingly prioritising possessions that supply greater lasting value retention in an extra discerning investment environment,” the report discusses.
Therefore, Savills Singapore is forecasting general rental growth throughout most industrial segments to stay steady this year. The company is forecasting rental development for multiple-user factories and business parks to come in between 0% and 2% in 2026, while warehouse and logistics rents are anticipated to expand between 0% and 1%.
Singapore industrial sales weakened last quarter, amid an extra careful operating setting. 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, says Savills. “The subdued turnover mirrors continued buyer selectiveness, with capital release largely focused in assets supplying more powerful principles, longer-term worth conservation, or functional benefits,” the record adds.
While transaction quantity declined, Savills keeps in mind that need remains maintained for “well-positioned assets with a reasonable complete value quantum”. Specifically, the firm highlights a clear change in buyer choice towards industrial assets with longer land tenures.
Rents for Savills’ basket of prime stockroom and logistics assets climbed 0.4% q-o-q to $1.83 psf monthly, sustained by resilient demand for high-quality logistics centers. On the other hand, rents 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 occupant perception and pricing level of sensitivity within the prime private factory sector”.
In the rental market, general leasing quantity also moderated, with JTC rental information showing a 1.2% q-o-q decline to 2,867 deals in 1Q2026. Meanwhile, rental rate activities were mixed, emphasizing an extra careful leasing market.
Savills expects view in the commercial market to remain mindful, as the Middle East problem possibly weighs on economic activity in the following months. Against this backdrop, investor and occupier demand are expected to remain careful, skewing in the direction of “modern, well-located and higher-specification assets,” claims Alan Cheong, executive director for research and working as a consultant at Savills Singapore.
Industrial assets with longer periods in Singapore are seeing greater demand, as worldwide uncertainties prompt a flight to quality amongst occupants and investors, according to a research report by Savills Singapore.
