Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
In the rental market, total leasing volume additionally moderated, with JTC rental data showing a 1.2% q-o-q decrease to 2,867 transactions in 1Q2026. On the other hand, rental rate activities were blended, underscoring an extra discerning leasing market.
While deal volume declined, Savills keeps in mind that need continues to be maintained for “well-positioned assets with a reasonable overall worth quantum”. Particularly, the company highlights a clear shift in purchaser preference in the direction of commercial possessions with longer land periods.
Values of 30-year leasehold commercial assets tracked by Savills fell 0.6% q-o-q to $353 psf in 1Q2026, reflecting a lower cravings amongst capitalists for such properties. On the other hand, worths of 60-year leasehold properties climbed up 1.4% q-o-q to $569 psf throughout the very same period. Property properties found even stronger growth, with costs increasing 2.9% q-o-q to $876 psf.
Rental fees for Savills’ basket of prime storehouse and logistics possessions increased 0.4% q-o-q to $1.83 psf per month, supported by resistant need for high-grade logistics facilities. 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 company credits to “better occupant selectivity and rates sensitivity within the prime private factory sector”.
Savills expects sentiment in the commercial market to remain mindful, as the Middle East conflict potentially weighs on economic event in the following months. Against this background, financier and inhabitant demand are anticipated to stay selective, skewing in the direction of “modern, well-located and higher-specification assets,” claims Alan Cheong, executive director for research and consultancy at Savills Singapore.
Therefore, Savills Singapore is predicting overall rental growth throughout many commercial sectors to continue to be steady this year. The company is anticipating rental development for multiple-user factories and business parks to come in between 0% and 2% in 2026, while warehouse and logistics rents are expected to grow in between 0% and 1%.
” The stronger performance of longer-tenure possessions emphasizes a trip to quality and tenure protection, with financiers significantly prioritising possessions that offer greater long-lasting value retention in a more careful financial investment setting,” the report explains.
Industrial properties with longer periods in Singapore are observing greater demand, as international uncertainties prompt a flight to quality amongst occupiers and investors, according to a study report by Savills Singapore.
Singapore industrial sales weakened last quarter, amid a much more mindful operating setting. JTC Corp’s sales caution information shows that strata industrial sales fell 17.5% q-o-q to 335 offers, the lowest quarterly volume since 2020, says Savills. “The restrained turn over reflects continued buyer selectiveness, with capital release mostly focused in assets supplying stronger principles, longer-term worth preservation, or functional benefits,” the report includes.
