Singapore strata industrial transactions rise 19.7% in Q2 after two quarters of declines

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.