Savills Research shares that investors and occupiers are becoming increasingly selective in Singapore’s industrial market, with stronger demand emerging for longer-tenure and modern industrial assets amid a more cautious operating environment.

While broader industrial activity moderated in the first quarter, demand continued to favour quality assets offering operational efficiency and supply chain resilience.

Strata industrial sales remained subdued in Q1/2026 as investors and owner-occupiers adopted a more defensive stance amid ongoing economic uncertainty. Transaction volumes declined 17.5% quarter-on-quarter (QoQ) to 335 deals, the lowest quarterly level recorded since 2020.

However, pricing performance diverged significantly by tenure profile, reflecting growing investor preference for longer-term value preservation.
Values of 30-year leasehold industrial assets edged down by 0.6% QoQ to S$353 per sq ft, while 60-year leasehold assets recorded firmer growth of 1.4% QoQ to S$569 per sq ft. Freehold industrial properties outperformed, rising 2.5% QoQ to S$876 per sq ft in Q1/2026.

Meanwhile, leasing demand remained selective rather than expansionary, supported by demand from supply chain, e-commerce, advanced manufacturing and engineering occupiers seeking operationally efficient and future-ready facilities.

Savills' basket of prime warehouse and logistics assets recorded a firmer 0.4% QoQ increase in rents, reflecting continued resilience for high-quality logistics facilities. In contrast, Savills’ prime multiple-user factory rents declined by 1.4% QoQ, highlighting greater occupier selectivity and pricing sensitivity within the private factory segment.

Ashley Swan, Executive Director, Commercial & Industrial, Savills Singapore, said: "Despite ever increasing global uncertainty and further disruptions expected, the Singapore industrial market continues to exhibit resilience and overall stability. Occupiers are likely to maintain a more cautious "wait & see" approach to expansion unless necessary. This in turn should keep demand fairly subdued, but stable with the focus expected to remain on higher spec assets with longer tenures."

Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore, commented: "Despite the resilience observed in the first quarter of 2026, prolonged geopolitical tensions in the Middle East could weigh on economic activity in the coming months.

Occupiers are becoming more cautious amid global uncertainties, leading to steady but less aggressive take-up of space. At the same time, the ongoing flight-to-quality trend is expected to persist, with demand increasingly skewed towards modern, well-located and higher-specification assets."

Looking ahead, Savills Singapore expects overall rental growth across most industrial segments to stabilise rather than expand, with rental growth for multiple-user factories and business parks projected at between 0% and 2% in 2026, while warehouse and logistics rents are expected to moderate further to between 0% and 1%.

Occupier demand is expected to remain relatively resilient, although buyers and tenants are likely to adopt a more selective approach with greater emphasis on asset quality, operational efficiency and yield stability.

Table 1: Savills Rental Forecast For Multiple-User Factory And Warehouse & Logistics Segments

Read the report here.