Industrial market splits as freehold prices rise, leasehold slips

Values climbed whilst deal flow weakened to lowest since 2020.

Freehold industrial prices in Singapore rose 2.5% in the first quarter (Q1) of 2026, whilst transaction volumes fell to their lowest quarterly level since 2020, according to Savills Research.

Strata industrial sales remained subdued in the quarter, with transaction volumes declining 17.5% quarter on quarter (QoQ) to 335 deals.

Performance diverged across tenure types, as 30-year leasehold industrial assets fell 0.6% to $353 per square foot (sq ft), whilst 60-year leasehold assets rose 1.4% to $569 per sq ft. Freehold industrial properties rose 2.5% to $876 per sq ft.

Leasing demand came from supply chain, e-commerce, advanced manufacturing, and engineering occupiers, whilst demand focused on operational efficiency and supply chain resilience.

Despite Savills’ basket of prime warehouse and logistics assets recording a 0.4% QoQ increase in rents, prime multiple-user factory rents fell 1.4% in the quarter.

Ashley Swan, Executive Director, Commercial and Industrial at Savills Singapore, said the industrial market remains stable despite rising global uncertainty and expected disruptions, with occupiers expressing continued caution and delaying expansion plans unless necessary.

Swan added that this will keep demand muted but steady, with continued focus on higher-specification assets with longer lease tenures.

Alan Cheong, Executive Director, Research & Consultancy at Savills Singapore, said the market’s performance in Q1 2026 reflects resilience, but warned that prolonged geopolitical tensions in the Middle East could affect economic activity in the months ahead.

Savills expects rental growth across most industrial segments to stabilise in 2026, forecasting multiple-user factory and business park rents at 0% to 2% growth, whilst warehouse and logistics rents are expected to grow at 0% to 1%.