Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
The report also emphasize JTC’s current enhancements to the commercial land lease structure. Reported in March, the enhancements consist of offering an extra three years of lease tenure for all new greenfield commercial developments to cover the building and growth period, and a brand-new plan to allow qualified tenants on 20-year JTC leases to prolong them by approximately two tranches of 5 years.
Furthermore, Singapore’s building sector is positioned to grow due to huge tasks, including Changi Airport Terminal 5 and the growth of Marina Bay Sands. This, in turn, would equate to even more demand for purpose-built dorms, with business additionally significantly looking for to transform manufacturing facility space right into dormitories, Knight Frank claims.
Regardless of the continuous market chaos, Knight Frank states brilliant areas stay for Singapore, given its position as an appealing and trusted financial investment and service center. “As United States Head of state Trump’s current announcement of the 10% tariff imposed on Singapore goods imported in the US seems the international standard floor (presently), manufacturers may also consider expanding or moving last-stage production tasks to Singapore,” the record adds.
Rising stress between the US and China, noted by tariffs and vindictive tolls, are reducing worldwide trade circulations, that Knight Frank anticipates to detrimentally affect Singapore’s production, electronics and logistics sectors. Already, Singapore’s 2025 GDP forecast has been reduced, with the Ministry of Trade and Market decreasing its price quote earlier this month to in between 0% and 2%, down from 1% to 3%.
Knight Frank has reduced its Singapore factory lease growth projection for 2025 to in between 0% and 2%, below the 1% to 3% range forecasted formerly. The lesser forecast comes amidst “stormy weather forward” for the industrial field, the firm claims in an April research review.
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“The current spate of tax announcements and changes in the days forward have actually created and continue to produce strengthened uncertainty that compel industrial users to take on a careful stance, affecting transfers and developments,” notes Calvin Yeo, head of occupier strategy and services at Knight Frank Singapore.
In the industrial realty industry, Knight Frank predicts the instant influence of the trade battle will be a decrease in transaction volume as buyers and occupiers relocate into a form of pause. “Continuous purchases might be postponed as influenced parties turn careful and wait on even more of the circumstance to unfold,” the report reads.
This is anticipated to put a more drag out commercial property sales task, that has currently revealed a decline ever since the last quarter of 2024. Data assembled by Knight Frank show that overall industrial sales worth dropped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing task additionally decreased, falling 0.4% q-o-q to 3,008 rental transactions. The purchases amounted to $25.6 million in value, 1.1% lower q-o-q.
