Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Values of 30-year leasehold industrial properties tracked by Savills slipped 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lower appetite amongst capitalists for such assets. On the other hand, worths of 60-year leasehold properties climbed 1.4% q-o-q to $569 psf across the exact same duration. Estate assets found even more powerful development, with prices increasing 2.9% q-o-q to $876 psf.
Lucerne Grand City Development Limited (CDL)
Savills expects belief in the commercial market to continue to be careful, as the Middle East problem possibly evaluates on economic action in the forthcoming months. Versus this backdrop, investor and occupier need are anticipated to remain careful, skewing towards “contemporary, well-located and higher-specification assets,” states Alan Cheong, executive director for research and consultancy at Savills Singapore.
Rents for Savills’ basket of prime storehouse and logistics assets rose 0.4% q-o-q to $1.83 psf each month, sustained by durable need for high-grade logistics centers. On the other hand, leas for prime multiple-user factories tracked by Savills dropped by 1.4% q-o-q to $2.27 psf, which the firm credits to “better occupant selectivity and prices level of sensitivity within the prime exclusive factory section”.
In the rental market, total leasing volume additionally moderated, with JTC rental data revealing a 1.2% q-o-q decrease to 2,867 transactions in 1Q2026. Meanwhile, rental price activities were blended, underscoring a much more careful leasing market.
Industrial assets with a lot longer tenures in Singapore are viewing higher need, as global unpredictabilities prompt a flight to quality among tenants and investors, according to a research report by Savills Singapore.
Because of this, Savills Singapore is forecasting general rental growth throughout most industrial sectors to stay secure this year. The company is forecasting rental development for multiple-user factories and business parks to find in between 0% and 2% in 2026, while warehouse and logistics rents are expected to expand in between 0% and 1%.
Singapore industrial sales weakened last quarter, amidst a more careful operating atmosphere. JTC Corp’s sales caveat information reveals that strata commercial sales dropped 17.5% q-o-q to 335 offers, the lowest quarterly volume since 2020, claims Savills. “The controlled turnover mirrors persisted customer selectivity, with capital release greatly concentrated in assets offering stronger basics, longer-term worth conservation, or operational benefits,” the report includes.
” The stronger efficiency of longer-tenure assets emphasizes a flight to quality and tenure protection, with capitalists increasingly prioritising assets that use higher long-lasting value retention in an extra careful investment environment,” the report describes.
While deal quantity decreased, Savills notes that demand remains maintained for “well-positioned properties with an affordable total worth quantum”. Specifically, the company highlights a clear shift in customer preference in the direction of industrial assets with longer land tenures.
