Warehouses face 1% rent cap as demand shifts to smaller, high-spec spaces

Multiple-user factory rents are holding up better, with up to 2% projected growth.

General warehouse rents are expected to grow by 0% to 1% in 2026, as US tariffs and cost pressures influence regional supply chain decisions, according to a SAVILLS report.

Multiple-user factory space rents are projected to rise by up to 2% as occupiers favour smaller and more cost-effective premises.

Occupier demand is expected to increasingly favour “smart” and high-specification industrial facilities that support automation, higher power loads, and operational efficiency.

“With rising operating costs and the continuing flux in US tariff rates, some companies are reassessing their expansion strategies and capital commitments,” said Alan Cheong, Executive Director, Research & Consultancy, SAVILLS Singapore.

In the logistics segment, modern warehouse space, particularly cold storage, is expected to see firmer demand, supported by domestic consumption and relatively limited new supply.

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