Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
In the industrial realty industry, Knight Frank anticipates the prompt impact of the trade war will be a decline in transaction quantity as buyers and occupiers move right into a form of pause. “Ongoing purchases might be postponed as impacted parties transform careful and wait for more of the circumstance to unfold,” the report reads.
Knight Frank has lowered its Singapore plant lease development projection for 2025 to in between 0% and 2%, below the 1% to 3% range anticipated formerly. The lower projection comes amid “rainy weather to come” for the industrial field, the firm says in an April research review.
Intensifying stress in between the US and China, marked by tariffs and retaliatory tariffs, are slowing international trade circulations, that Knight Frank expects to detrimentally impact Singapore’s production, electronics and logistics sectors. Currently, Singapore’s 2025 GDP projection has actually been devalued, with the Ministry of Trade and Market lowering its price quote earlier this month to between 0% and 2%, below 1% to 3%.
“The current wave of tariff announcements and adjustments in the days to come have created and remain to create strengthened unpredictability that oblige industrial players to adopt a mindful position, impacting relocations and growths,” notices Calvin Yeo, head of occupier method and services at Knight Frank Singapore.
In spite of the recurring market chaos, Knight Frank says brilliant spots stay for Singapore, offered its setting as an eye-catching and relied on investment and organization hub. “As United States Head of state Trump’s current statement of the 10% tariff imposed on Singapore goods imported in the US appears to be the international baseline flooring (at the moment), producers might also take into consideration broadening or relocating last-stage manufacturing tasks to Singapore,” the report adds.
On top of that, Singapore’s building industry is poised to expand because of huge jobs, including Changi Airport Terminal 5 and the development of Marina Bay Sands. This, in turn, would certainly translate to more demand for purpose-built dorms, with business also progressively looking for to transform manufacturing facility area into dorm rooms, Knight Frank states.
This is assumed to place a further drag on commercial property sales task, that has currently shown a decline ever since the last quarter of 2024. Data put together by Knight Frank show that total industrial sales value dropped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing task also decreased, falling 0.4% q-o-q to 3,008 rental deals. The purchases amounted to $25.6 million in value, 1.1% reduced q-o-q.
The report also highlights JTC’s current improvements to the industrial land lease framework. Revealed in March, the enhancements consist of providing an extra 3 years of lease tenure for all new greenfield industrial advancements to cover the building and development duration, and a new scheme to enable qualified lessees on 20-year JTC leases to prolong them by approximately 2 tranches of five years.
