Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
Escalating pressures between the United States and China, noted by tariffs and vindictive tolls, are slowing worldwide trade flows, that Knight Frank anticipates to detrimentally affect Singapore’s production, electronics and logistics sectors. Currently, Singapore’s 2025 GDP projection has been reduced, with the Ministry of Trade and Industry decreasing its price quote previously this month to in between 0% and 2%, below 1% to 3%.
Additionally, Singapore’s construction sector is poised to expand due to big projects, including Changi Airport Terminal 5 and the development of Marina Bay Sands. This, subsequently, would certainly translate to more demand for purpose-built dorms, with firms also progressively looking for to transform factory space into dorm rooms, Knight Frank claims.
Regardless of the continuous market turmoil, Knight Frank states bright places remain for Singapore, offered its placement as an appealing and trusted investment and business center. “As United States President Trump’s current news of the 10% tariff imposed on Singapore goods imported in the US appears to be the international standard floor (right now), producers could also take into consideration broadening or moving last-stage production tasks to Singapore,” the report adds.
In the industrial real estate industry, Knight Frank anticipates the immediate impact of the business war will be a decline in operation quantity as buyers and occupiers relocate right into a state of pause. “Ongoing transactions might be put on hold as affected parties transform careful and wait for more of the scenario to unravel,” the report sees.
Pinetree Hill UOL Group & Singapore Land Group Limited
The report also emphasize JTC’s recent enhancements to the commercial land lease structure. Declared in March, the enhancements consist of giving an additional 3 years of lease tenure for all brand-new greenfield commercial advancements to cover the building and growth period, and a brand-new system to enable qualified tenants on 20-year JTC rents to extend them by approximately 2 tranches of five years.
This is anticipated to put a more drag on commercial property sales activity, that has currently shown a decrease since the last quarter of 2024. Information put together by Knight Frank show that total industrial sales worth 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 transactions. The purchases totaled up to $25.6 million in value, 1.1% reduced q-o-q.
“The current wave of tax statements and adjustments in the days forward have actually produced and continue to produce increased unpredictability that compel industrial players to adopt a cautious position, impacting transfers and growths,” notes Calvin Yeo, head of occupier technique and services at Knight Frank Singapore.
Knight Frank has decreased its Singapore factory rental development projection for 2025 to in between 0% and 2%, down from the 1% to 3% range anticipated formerly. The lesser projection comes amidst “rainy weather ahead” for the commercial industry, the firm states in an April research report.
