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. Announced in March, the enhancements include providing an added three years of lease tenure for all brand-new greenfield industrial advancements to cover the building and advancement duration, and a brand-new plan to allow eligible lessees on 20-year JTC leases to prolong them by as much as 2 tranches of five years.
Intensifying pressures between the US and China, noted by tolls and vindictive tariffs, are slowing down worldwide trade circulations, which Knight Frank anticipates to detrimentally influence Singapore’s manufacturing, electronic devices and logistics sectors. Currently, Singapore’s 2025 GDP forecast has been devalued, with the Ministry of Trade and Market reducing its quote previously this month to in between 0% and 2%, below 1% to 3%.
In the industrial real estate industry, Knight Frank anticipates the immediate influence of the business war will be a decline in transaction quantity as buyers and occupiers move into a state of pause. “Continuous transactions could be postponed as influenced parties transform cautious and wait for more of the circumstance to unravel,” the report sees.
“The current spate of tariff statements and changes in the days forward have actually developed and remain to create increased uncertainty that oblige commercial users to embrace a cautious posture, influencing movings and expansions,” observes Calvin Yeo, head of tenant strategy and services at Knight Frank Singapore.
Regardless of the recurring market turmoil, Knight Frank states rich places stay for Singapore, offered its setting as an eye-catching and relied on investment and company center. “As United States Head of state Trump’s current news of the 10% toll imposed on Singapore goods imported in the US seems the international standard floor (right now), manufacturers might also take into consideration increasing or relocating last-stage production tasks to Singapore,” the report adds.
Knight Frank has reduced its Singapore plant lease development forecast for 2025 to between 0% and 2%, down from the 1% to 3% range predicted previously. The lesser projection comes in the middle of “rainy weather to come” for the industrial field, the firm says in an April research review.
This is assumed to place a further drag on industrial property sales task, that has already shown a decline since the last quarter of 2024. Information assembled by Knight Frank suggest that complete industrial sales worth fell by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing task additionally declined, dropping 0.4% q-o-q to 3,008 rental deals. The deals amounted to $25.6 million in value, 1.1% lower q-o-q.
Additionally, Singapore’s construction sector is positioned to grow as a result of huge tasks, consisting of Changi Airport Terminal 5 and the expansion of Marina Bay Sands. This, subsequently, would translate to even more need for purpose-built dormitories, with firms likewise increasingly seeking to convert manufacturing facility room right into dormitories, Knight Frank says.
