Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
Escalating tensions between the United States and China, marked by tolls and retaliatory tariffs, are slowing down international trade flows, that Knight Frank expects to detrimentally influence Singapore’s manufacturing, electronics and logistics sectors. Already, Singapore’s 2025 GDP forecast has actually been devalued, with the Ministry of Trade and Sector reducing its quote earlier this month to in between 0% and 2%, down from 1% to 3%.
Knight Frank has decreased its Singapore plant rental growth forecast for 2025 to in between 0% and 2%, down from the 1% to 3% range forecasted formerly. The lower forecast comes in the middle of “stormy weather forward” for the industrial field, the firm states in an April research credit report.
This is assumed to put a further drag on commercial property sales task, which has already shown a decrease ever since the last quarter of 2024. Information assembled by Knight Frank show that total industrial sales value dropped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing activity additionally decreased, dropping 0.4% q-o-q to 3,008 rental deals. The transactions amounted to $25.6 million in value, 1.1% lower q-o-q.
Regardless of the continuous market chaos, Knight Frank states rich areas remain for Singapore, provided its placement as an appealing and relied on investment and organization hub. “As United States President Trump’s current announcement of the 10% tariff imposed on Singapore goods imported in the US appears to be the international standard floor (presently), manufacturers could also think about broadening or moving last-stage manufacturing tasks to Singapore,” the record adds.
“The existing wave of tariff statements and adjustments in the days to come have actually developed and remain to develop increased unpredictability that compel industrial users to take on a cautious position, affecting movings and growths,” notices Calvin Yeo, head of tenant approach and solutions at Knight Frank Singapore.
In addition, Singapore’s construction field is positioned to grow because of huge projects, consisting of Changi Airport Terminal 5 and the growth of Marina Bay Sands. This, consequently, would convert to more need for purpose-built dorm rooms, with business additionally progressively seeking to convert manufacturing facility room into dorm rooms, Knight Frank states.
The report also highlights JTC’s current enhancements to the commercial land lease structure. Declared in March, the improvements include providing an extra three years of lease tenure for all new greenfield commercial developments to cover the building and development duration, and a new system to allow eligible tenants on 20-year JTC leases to extend them by approximately two tranches of 5 years.
In the industrial property industry, Knight Frank anticipates the instant effect of the business war will be a decline in transaction quantity as buyers and occupiers move right into a state of pause. “Ongoing transactions could be put on hold as impacted parties transform cautious and await even more of the situation to unravel,” the report reads.
