Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Worths of 30-year leasehold industrial assets monitor by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lower cravings amongst financiers for such properties. In contrast, values of 60-year leasehold assets climbed up 1.4% q-o-q to $569 psf throughout the same duration. Estate properties saw even more powerful development, with costs increasing 2.9% q-o-q to $876 psf.
” The stronger performance of longer-tenure possessions underscores a flight to quality and period protection, with investors significantly prioritising properties that provide better long-term value retention in a more selective financial investment atmosphere,” the record clarifies.
In the rental market, overall leasing volume additionally regulated, with JTC rental information revealing a 1.2% q-o-q decrease to 2,867 purchases in 1Q2026. Meanwhile, rental price movements were combined, highlighting a much more selective leasing market.
As a result, Savills Singapore is projecting total rental development throughout a lot of industrial sections to stay secure 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 grow between 0% and 1%.
Savills anticipates view in the commercial market to continue to be careful, as the Middle East conflict possibly evaluates on economic activity in the forthcoming months. Against this backdrop, capitalist and inhabitant demand are expected to stay careful, skewing towards “modern, well-located and higher-specification assets,” claims Alan Cheong, executive director for research and consultancy at Savills Singapore.
Industrial properties with longer tenures in Singapore are observing greater demand, as global unpredictabilities prompt a flight to quality amongst tenants and investors, according to a study report by Savills Singapore.
Rents for Savills’ basket of prime storehouse and logistics properties rose 0.4% q-o-q to $1.83 psf monthly, sustained by durable need for high-quality logistics facilities. On the other hand, rents for prime multiple-user manufacturing facilities tracked by Savills dropped 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 exclusive factory sector”.
While deal quantity dropped, Savills notes that need remains continued for “well-positioned assets with an affordable total value quantum”. Specifically, the company highlights a clear shift in purchaser preference in the direction of commercial properties with longer land tenures.
Singapore industrial sales weakened last quarter, amid a much more careful operating atmosphere. JTC Corp’s sales caveat information reveals that strata industrial sales dropped 17.5% q-o-q to 335 offers, the most affordable quarterly volume since 2020, claims Savills. “The restrained turn over reflects persisted customer selectiveness, with funding release mostly focused in assets using more powerful basics, longer-term worth conservation, or operational advantages,” the report adds.
