Singapore strata industrial transactions rise 19.7% in Q2 after two quarters of declines
The rebound signals improving sentiment, but selective demand may widen tenure-based pricing gaps as buyers favour freehold and longer-lease assets over 30-year properties.
Singapore strata industrial transactions rose 19.7% quarter-on-quarter to 437 deals in Q2, reversing two consecutive quarterly declines as multiple-user factory sales increased 21.4%.
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Multiple-user factory units drove the sales recovery.
Singapore's strata industrial sales market rebounded in the second quarter, reversing two consecutive quarters of decline as transaction volume increased 19.7% quarter-on-quarter to 437 deals, according to Savills.
The recovery was driven primarily by multiple-user factory units, where sales rose 21.4%, while warehouse transactions remained relatively stable.
Savills said activity was supported partly by the launch of Gate+, a new B2 multiple-user factory development at Tukang Innovation Drive. The project attracted interest from investors and owner-occupiers seeking relatively affordable industrial assets amid a more stable interest-rate environment.
Despite the recovery in volumes, price growth remained modest. JTC's multiple-user factory price index increased 0.4% quarter-on-quarter in Q2, slowing from gains recorded in previous quarters.
Savills said stabilising borrowing costs improved sentiment, but buyers remained highly selective and price sensitive. Demand continued to favour well-located assets with stronger remaining lease tenures, supporting overall price resilience while limiting broader-based appreciation.
Tenure was a particularly important differentiator. Savills' basket of strata industrial properties showed prices for 30-year leasehold assets falling a further 1.9% quarter-on-quarter to S$346 per sq ft, as buyers became increasingly reluctant to acquire shorter-tenure properties amid the impact of lease decay on capital value preservation.
By contrast, 60-year leasehold properties edged up 0.3% to S$571 per sq ft, while freehold industrial assets continued to outperform, rising 1.6% to S$890 per sq ft.
Savills said the widening price gap between shorter- and longer-tenure assets reflects investors' continued preference for tenure security and asset preservation amid an uncertain economic environment.