Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
Knight Frank has reduced its Singapore plant rental growth forecast for 2025 to in between 0% and 2%, below the 1% to 3% range forecasted formerly. The lower forecast comes amidst “rainy climate forward” for the commercial sector, the firm says in an April research review.
This is assumed to put a further drag out industrial property sales task, that has already revealed a decrease ever since the last quarter of 2024. Data assembled by Knight Frank indicate that complete industrial sales value fell 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 deals totaled up to $25.6 million in value, 1.1% reduced q-o-q.
In the industrial realty market, Knight Frank predicts the immediate effect of the business battle will be a reduction in operation volume as buyers and occupiers relocate into a state of pause. “Ongoing purchases could be put on hold as impacted parties turn cautious and wait for even more of the scenario to unravel,” the report checks out.
The report also highlights JTC’s recent enhancements to the commercial land lease framework. Declared in March, the improvements include offering an extra three years of lease tenure for all brand-new greenfield commercial growths to cover the building and growth duration, and a brand-new plan to enable eligible lessees on 20-year JTC rents to prolong them by up to 2 tranches of 5 years.
“The current wave of tariff statements and modifications in the days to come have actually developed and remain to develop increased uncertainty that compel industrial users to embrace a cautious position, impacting movings and developments,” notices Calvin Yeo, head of occupier technique and services at Knight Frank Singapore.
In spite of the ongoing market turmoil, Knight Frank states rich places stay for Singapore, provided its position as an eye-catching and relied on investment and organization center. “As US Head of state Trump’s recent news of the 10% toll imposed on Singapore goods imported in the US appears to be the international standard floor (presently), producers may also consider increasing or moving last-stage manufacturing tasks to Singapore,” the record adds.
Rising tensions in between the US and China, marked by tariffs and retaliatory tariffs, are slowing down international trade circulations, which Knight Frank anticipates to detrimentally affect Singapore’s production, electronics and logistics sectors. Currently, Singapore’s 2025 GDP projection has been devalued, with the Ministry of Trade and Market reducing its quote previously this month to in between 0% and 2%, down from 1% to 3%.
On top of that, Singapore’s construction market is poised to grow due to big projects, consisting of Changi Airport Terminal 5 and the growth of Marina Bay Sands. This, subsequently, would certainly translate to even more demand for purpose-built dorms, with business likewise increasingly seeking to convert manufacturing facility area right into dormitories, Knight Frank claims.
