Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
The report also highlights JTC’s current enhancements to the industrial land lease framework. Revealed in March, the improvements include offering an additional 3 years of lease period for all new greenfield commercial growths to cover the building and development duration, and a new scheme to enable qualified tenants on 20-year JTC leases to prolong them by up to two tranches of 5 years.
“The existing spate of tax statements and adjustments in the days forward have actually created and remain to develop increased unpredictability that oblige commercial players to adopt a careful position, affecting movings and growths,” observes Calvin Yeo, head of occupier approach and services at Knight Frank Singapore.
In the industrial property market, Knight Frank predicts the prompt influence of the business war will be a decrease in operation volume as buyers and occupiers relocate into a form of pause. “Recurring transactions might be postponed as influenced parties transform careful and wait for more of the circumstance to unravel,” the report checks out.
Regardless of the recurring market turmoil, Knight Frank claims bright places remain for Singapore, offered its setting as an eye-catching and relied on investment and business hub. “As United States Head of state Trump’s current statement of the 10% tariff imposed on Singapore goods imported in the US appears to be the international baseline flooring (currently), producers may also think about expanding or relocating last-stage manufacturing tasks to Singapore,” the record includes.
Intensifying tensions between the US and China, noted by tariffs and retaliatory tariffs, are reducing global trade circulations, which Knight Frank expects to detrimentally impact Singapore’s production, electronics and logistics sectors. Currently, Singapore’s 2025 GDP projection has actually been reduced, with the Ministry of Trade and Sector lowering its quote earlier this month to in between 0% and 2%, down from 1% to 3%.
Additionally, Singapore’s construction market is poised to expand as a result of large jobs, consisting of Changi Airport Terminal 5 and the expansion of Marina Bay Sands. This, consequently, would certainly equate to more need for purpose-built dormitories, with firms also increasingly looking for to transform manufacturing facility space into dormitories, Knight Frank says.
This is assumed to place a further drag out commercial property sales activity, which has currently revealed a decline since the last quarter of 2024. Information compiled by Knight Frank suggest that total industrial sales value dropped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing activity additionally declined, dropping 0.4% q-o-q to 3,008 rental transactions. The transactions amounted to $25.6 million in value, 1.1% reduced q-o-q.
Knight Frank has reduced its Singapore plant rental development projection for 2025 to in between 0% and 2%, below the 1% to 3% range forecasted formerly. The lesser projection comes amidst “stormy weather forward” for the industrial field, the firm states in an April research credit report.
