For Immediate Release – SAVILLS Research shared that industrial assets with shorter remaining land tenures drew increased interest from both investors and occupiers in 2025. Prices of 30-year leasehold industrial properties in SAVILLS’ basket rose by 5.1% year-on-year (YoY), accelerating from the 4.1% growth recorded in 2024. In comparison, price growth for longer-tenure assets moderated, with freehold prices increasing by 2.4% YoY and 60-year leasehold prices rising by 3.9% YoY.
This divergence coincided with occupiers and investors adjusting strategies in response to sustained global uncertainty, rising operating costs and evolving supply chain considerations. Overall leasing activity remained subdued, with full-year leasing volumes for factory and warehouse space rising modestly by 1.4% YoY to 12,208 transactions, supported by resilient warehouse demand. Investment sentiment also remained cautious, as total industrial sales transactions declined by 8.2% YoY to 1,611 deals in 2025.
Leasing demand across the industrial sector reflected similar themes of caution and optimisation. Warehouse leasing volumes rose by 6.9% YoY to 2,021 transactions in 2025 — the highest level since data collection began in 2000 — supported by sustained requirements for cold storage facilities and modern logistics warehouse space. Despite significant new supply completions in the first half of the year, including Maersk’s World Gateway 2 and Mapletree Joo Koon Logistics Hub, the warehouse vacancy rate edged down to 10.2% in Q4/2025.
In the factory segment, leasing activity remained subdued amid continued supply additions. Multiple-user factory vacancies rose to 10.1% in Q4/2025, while single-user factory vacancies increased marginally quarter-on-quarter but remained below year-ago levels, supported by largely pre-committed developments.
Reflecting these conditions, rental growth diverged across segments. Prime warehouse and logistics rents recorded stronger growth, increasing 5.7% YoY in Q4/2025. In contrast, prime multiple-user factory rents rose at a more moderate pace of 1.1% YoY, easing from the 2.8% YoY growth recorded in 2024.
Ashley Swan, Executive Director, Commercial & Industrial, SAVILLS Singapore said, “The numbers reflect the overall caution in the market where continued economic uncertainty and rising cost mean that most investors and occupiers take longer and are increasingly prudent when making decisions. Having said that, the market will be aided by strong governmental support in advanced manufacturing and R&D which should translate to a gradual pick up in demand over the long term.”
Looking ahead, SAVILLS Singapore expects the industrial market to remain resilient but marked by moderating rental growth in 2026, as external headwinds intensify. Occupier demand is expected to increasingly favour “smart” and high-specification industrial facilities that support automation, higher power loads and operational efficiency. Within the logistics segment, demand for modern warehouse space — particularly cold storage — is expected to remain firm, supported by domestic consumption and relatively limited supply.
However, as regional supply chains continue to be reshaped by US tariffs and cost considerations, SAVILLS Singapore forecasts rental growth for general warehousing space to moderate to between 0% and 1% in 2026. For multiple-user factory space, rents are projected to increase by around 0% to 2%, as smaller and more cost-effective premises remain attractive to occupiers prioritising flexibility and efficiency.
Alan Cheong, Executive Director, Research & Consultancy, SAVILLS Singapore said, “With rising operating costs and the continuing flux in US tariff rates, some companies are reassessing their expansion strategies and capital commitments. These conditions are influencing how both occupiers and investors approach risk and tenure in the industrial market.”
