Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
Despite the recurring market chaos, Knight Frank states brilliant spots stay for Singapore, offered its setting as an attractive and trusted investment and business hub. “As United States President Trump’s current statement of the 10% tariff imposed on Singapore goods imported in the US appears to be the international standard floor (currently), manufacturers might also consider broadening or relocating last-stage production tasks to Singapore,” the record includes.
“The current spate of tariff statements and adjustments in the days forward have created and continue to develop strengthened uncertainty that oblige industrial players to take on a cautious posture, impacting relocations and developments,” observes Calvin Yeo, head of tenant strategy and services at Knight Frank Singapore.
The report also emphasize JTC’s recent improvements to the commercial land lease structure. Declared in March, the enhancements include offering an additional three years of lease tenure for all brand-new greenfield commercial growths to cover the structure and growth duration, and a new plan to allow qualified lessees on 20-year JTC leases to prolong them by up to 2 tranches of 5 years.
Additionally, Singapore’s construction industry is positioned to grow because of huge projects, consisting of Changi Airport Terminal 5 and the growth of Marina Bay Sands. This, subsequently, would equate to more demand for purpose-built dorms, with firms likewise progressively looking for to transform manufacturing facility space into dorms, Knight Frank says.
In the commercial realty market, Knight Frank anticipates the prompt impact of the trade war will be a decline in transaction volume as buyers and occupiers relocate into a form of pause. “Ongoing purchases might be put on hold as influenced parties transform careful and wait for more of the situation to unravel,” the report sees.
This is anticipated to put a more drag on commercial property sales task, which has currently shown a decline ever since the last quarter of 2024. Information put together by Knight Frank suggest that overall industrial sales worth fell 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 transactions totaled up to $25.6 million in value, 1.1% lower q-o-q.
Knight Frank has lowered its Singapore factory rental development forecast for 2025 to between 0% and 2%, below the 1% to 3% range predicted previously. The lower forecast comes in the middle of “rainy weather forward” for the industrial industry, the firm claims in an April research report.
Escalating stress between the United States and China, marked by tariffs and retaliatory tariffs, are slowing down worldwide trade flows, which Knight Frank anticipates to detrimentally impact Singapore’s manufacturing, electronics and logistics sectors. Currently, Singapore’s 2025 GDP projection has been devalued, with the Ministry of Trade and Sector reducing its quote earlier this month to between 0% and 2%, down from 1% to 3%.
