Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Savills anticipates view in the commercial market to continue to be careful, as the Middle East conflict potentially weighs on economic activity in the forthcoming months. Versus this background, investor and occupier demand are prepared for 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.
Rents for Savills’ basket of prime stockroom and logistics possessions increased 0.4% q-o-q to $1.83 psf per month, sustained by resilient demand for premium logistics centers. On the other hand, leas for prime multiple-user warehouses tracked by Savills fell by 1.4% q-o-q to $2.27 psf, which the company credits to “greater occupier selectivity and rates level of sensitivity within the prime exclusive factory section”.
Values of 30-year leasehold commercial possessions tracing by Savills dropped 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lower cravings among capitalists for such assets. On the other hand, values of 60-year leasehold properties climbed up 1.4% q-o-q to $569 psf across the very same duration. Estate assets saw even stronger development, with rates rising 2.9% q-o-q to $876 psf.
In the rental market, total leasing volume additionally regulated, with JTC rental information revealing a 1.2% q-o-q decrease to 2,867 deals in 1Q2026. On the other hand, rental rate motions were blended, emphasizing an extra selective leasing market.
Consequently, Savills Singapore is predicting general rental growth across many commercial sectors to continue to be stable this year. The firm is forecasting rental development for multiple-user factories and business parks to come in between 0% and 2% in 2026, whilst warehouse and logistics rents are expected to expand in between 0% and 1%.
While deal volume dropped, Savills keeps in mind that need stays maintained for “well-positioned assets with a reasonable overall value quantum”. Particularly, the firm highlights a clear change in buyer preference towards industrial properties with longer land tenures.
” The more powerful efficiency of longer-tenure possessions highlights a trip to quality and period safety and security, with capitalists increasingly prioritising assets that supply higher lasting value retention in a much more discerning financial investment atmosphere,” the record discusses.
Singapore industrial sales weakened last quarter, amid a more mindful operating setting. JTC Corp’s sales caution data reveals that strata industrial sales fell 17.5% q-o-q to 335 deals, the lowest quarterly volume since 2020, states Savills. “The controlled turn over mirrors persisted purchaser selectivity, with resources release mostly focused in assets supplying stronger fundamentals, longer-term worth preservation, or functional benefits,” the record adds.
Industrial assets with a lot longer tenures in Singapore are seeing greater need, as global unpredictabilities prompt a flight to quality amongst occupiers and investors, according to a study report by Savills Singapore.
