Industrial assets with longer tenures in Singapore are seeing higher demand, as global uncertainties prompt a flight to quality among occupiers and investors, according to a research report by Savills Singapore.

Singapore industrial sales weakened last quarter, amid a more cautious operating environment. JTC Corp’s sales caveat data shows that strata industrial sales fell 17.5% q-o-q to 335 deals, the lowest quarterly volume since 2020, says Savills. “The subdued turnover reflects continued buyer selectivity, with capital deployment largely concentrated in assets offering stronger fundamentals, longer-term value preservation, or operational advantages,” the report adds.

While transaction volume declined, Savills notes that demand remains sustained for “well-positioned assets with a reasonable total value quantum”. In particular, the firm highlights a clear shift in buyer preference towards industrial assets with longer land tenures.

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Values of 30-year leasehold industrial assets tracked by Savills fell 0.6% q-o-q to $353 psf in 1Q2026, reflecting a lower appetite among investors for such assets. In contrast, values of 60-year leasehold assets climbed 1.4% q-o-q to $569 psf across the same period. Freehold assets saw even stronger growth, with prices rising 2.9% q-o-q to $876 psf.

“The stronger performance of longer-tenure assets underscores a flight to quality and tenure security, with investors increasingly prioritising assets that offer greater long-term value retention in a more selective investment environment,” the report explains.

In the rental market, overall leasing volume also moderated, with JTC rental data showing a 1.2% q-o-q decline to 2,867 transactions in 1Q2026. Meanwhile, rental rate movements were mixed, underscoring a more selective leasing market.

Rents for Savills’ basket of prime warehouse and logistics assets rose 0.4% q-o-q to $1.83 psf per month, supported by resilient demand for high-quality logistics facilities. On the other hand, rents for prime multiple-user factories tracked by Savills fell by 1.4% q-o-q to $2.27 psf, which the firm attributes to “greater occupier selectivity and pricing sensitivity within the prime private factory segment”.

Savills expects sentiment in the industrial market to remain cautious, as the Middle East conflict potentially weighs on economic activity in the coming months. Against this backdrop, investor and occupier demand are anticipated to stay selective, skewing towards “modern, well-located and higher-specification assets,” says Alan Cheong, executive director for research and consultancy at Savills Singapore.

As a result, Savills Singapore is projecting overall rental growth across most industrial segments to remain stable this year. The firm is forecasting rental growth 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 between 0% and 1%

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