Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
Despite the recurring market chaos, Knight Frank states rich places remain for Singapore, provided its setting as an attractive and trusted investment and business center. “As US Head of state Trump’s recent announcement of the 10% toll imposed on Singapore goods imported in the US seems the international baseline floor (presently), manufacturers could also consider broadening or moving last-stage production tasks to Singapore,” the report includes.
In addition, Singapore’s building industry is poised to grow as a result of large tasks, including Changi Airport Terminal 5 and the growth of Marina Bay Sands. This, subsequently, would convert to even more need for purpose-built dormitories, with business also significantly seeking to convert manufacturing facility area into dorm rooms, Knight Frank claims.
Otto Place Hoi Hup Realty & Sunway Group
The report also emphasize JTC’s current enhancements to the industrial land lease structure. Announced in March, the improvements include offering an added 3 years of lease period for all new greenfield industrial advancements to cover the building and advancement duration, and a new plan to allow qualified tenants on 20-year JTC leases to expand them by up to 2 tranches of five years.
In the industrial real estate industry, Knight Frank predicts the instant influence of the business war will be a decrease in transaction volume as buyers and occupiers relocate into a form of pause. “Recurring transactions might be postponed as influenced parties turn careful and wait for even more of the circumstance to unravel,” the report checks out.
“The current spate of tariff statements and adjustments in the days to come have actually created and remain to produce heightened unpredictability that oblige industrial users to embrace a cautious position, influencing movings and growths,” notes Calvin Yeo, head of occupier method and solutions at Knight Frank Singapore.
Intensifying pressures in between the US and China, marked by tariffs and retaliatory tolls, are slowing worldwide trade flows, that Knight Frank expects to detrimentally influence Singapore’s production, electronic devices and logistics sectors. Currently, Singapore’s 2025 GDP forecast has been downgraded, with the Ministry of Trade and Industry lowering its quote previously this month to in between 0% and 2%, below 1% to 3%.
This is expected to place a further drag on commercial property sales task, that has currently revealed a decline since the last quarter of 2024. Data put together by Knight Frank suggest that complete industrial sales worth slipped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing task additionally declined, falling 0.4% q-o-q to 3,008 rental transactions. The purchases totaled up to $25.6 million in value, 1.1% lower q-o-q.
Knight Frank has decreased its Singapore factory rental development forecast for 2025 to in between 0% and 2%, below the 1% to 3% range forecasted formerly. The lower forecast comes in the middle of “rainy weather forward” for the industrial sector, the firm says in an April research credit report.
