Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
The report also highlights JTC’s current improvements to the commercial land lease framework. Reported in March, the improvements include providing an added 3 years of lease tenure for all brand-new greenfield commercial growths to cover the structure and growth period, and a brand-new plan to allow qualified tenants on 20-year JTC leases to prolong them by as much as 2 tranches of five years.
This is assumed to place a further drag out commercial property sales activity, that has already revealed a decline since the last quarter of 2024. Information put together by Knight Frank indicate that overall industrial sales worth dropped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing activity additionally decreased, falling 0.4% q-o-q to 3,008 rental transactions. The purchases amounted to $25.6 million in value, 1.1% reduced q-o-q.
Furthermore, Singapore’s building industry is positioned to expand because of big tasks, including Changi Airport Terminal 5 and the growth of Marina Bay Sands. This, in turn, would certainly convert to more demand for purpose-built dormitories, with business additionally progressively looking for to convert manufacturing facility area into dormitories, Knight Frank says.
In spite of the ongoing market turmoil, Knight Frank claims bright places continue to be for Singapore, offered its placement as an appealing and relied on investment and organization center. “As United States President Trump’s current news of the 10% tariff imposed on Singapore goods imported in the US seems the international standard floor (right now), manufacturers might also consider increasing or moving last-stage manufacturing activities to Singapore,” the report adds.
Escalating stress between the United States and China, marked by tariffs and retaliatory tolls, are reducing international trade flows, that Knight Frank expects to detrimentally affect Singapore’s manufacturing, electronics and logistics sectors. Currently, Singapore’s 2025 GDP projection has actually been reduced, with the Ministry of Trade and Industry decreasing its estimate previously this month to in between 0% and 2%, down from 1% to 3%.
“The current spate of tax announcements and modifications in the days forward have actually developed and remain to produce strengthened uncertainty that compel industrial players to embrace a careful posture, affecting relocations and expansions,” observes Calvin Yeo, head of tenant strategy and solutions at Knight Frank Singapore.
In the industrial real estate market, Knight Frank predicts the instant influence of the trade war will be a decline in operation volume as buyers and occupiers relocate right into a state of pause. “Continuous deals might be put on hold as affected parties turn careful and wait on more of the circumstance to unfold,” the report sees.
Knight Frank has minimized its Singapore plant lease development projection for 2025 to between 0% and 2%, below the 1% to 3% range predicted formerly. The lower projection comes in the middle of “stormy weather to come” for the industrial industry, the firm claims in an April research credit report.
