Knight Frank trims 2025 factory rental growth forecast on ‘stormy weather ahead’ for industrial sector
Intensifying tensions between the US and China, marked by tolls and vindictive tariffs, are slowing down worldwide trade flows, that Knight Frank anticipates to detrimentally affect Singapore’s production, electronic devices and logistics sectors. Currently, Singapore’s 2025 GDP forecast has been reduced, with the Ministry of Trade and Industry lowering its estimate previously this month to in between 0% and 2%, down from 1% to 3%.
This is expected to put a further drag out industrial property sales activity, which has currently revealed a decline since the last quarter of 2024. Data put together by Knight Frank suggest that total industrial sales value slipped by 33.9% q-o-q to $680.9 million in 1Q2025. Leasing task additionally decreased, dropping 0.4% q-o-q to 3,008 rental transactions. The deals amounted to $25.6 million in value, 1.1% reduced q-o-q.
Regardless of the continuous market turmoil, Knight Frank claims bright areas stay for Singapore, offered its placement as an appealing and trusted financial investment and business center. “As United States Head of state Trump’s recent announcement of the 10% tariff imposed on Singapore goods imported in the US appears to be the international standard floor (at the moment), manufacturers may also think about expanding or relocating last-stage manufacturing tasks to Singapore,” the record adds.
“The current spate of tariff statements and adjustments in the days ahead have actually created and remain to develop increased uncertainty that oblige industrial users to take on a cautious posture, influencing relocations and growths,” observes Calvin Yeo, head of tenant technique and solutions at Knight Frank Singapore.
In addition, Singapore’s construction market is poised to expand because of big tasks, consisting of Changi Airport Terminal 5 and the expansion of Marina Bay Sands. This, in turn, would convert to even more need for purpose-built dorm rooms, with firms also significantly looking for to transform manufacturing facility room into dormitories, Knight Frank claims.
The report also highlights JTC’s recent improvements to the industrial land lease framework. Declared in March, the improvements include offering an extra 3 years of lease period for all brand-new greenfield industrial growths to cover the structure and development duration, and a brand-new plan to enable qualified lessees on 20-year JTC leases to prolong them by as much as two tranches of 5 years.
In the industrial property industry, Knight Frank predicts the immediate influence of the business war will be a decline in operation quantity as buyers and occupiers relocate right into a state of pause. “Continuous transactions could be put on hold as influenced parties turn cautious and wait for even more of the circumstance to unravel,” the report sees.
Knight Frank has decreased its Singapore plant rental growth forecast for 2025 to in between 0% and 2%, down from the 1% to 3% range anticipated formerly. The lower projection comes amidst “rainy weather ahead” for the commercial field, the firm states in an April research review.
