Nearly 4 in 5 occupiers eye warehouse portfolio expansion over the next 3 years

Emerging Southeast Asian markets are key growth targets. 

Logistics occupiers are planning to expand their Asia Pacific warehouse footprint over the next three years, thanks to growing market optimism.  

A recent CBRE survey polled nearly 100 senior decision makers overseeing the real estate logistics portfolios in companies ranging from third-party logistics (3PLs) to manufacturers, e-commerce platforms and  retailers. 

It found that 78% of logistics occupiers intended to expand their warehouse portfolio, with  slightly more than half of respondents eyeing significant growth. Emerging markets in Southeast Asia, such as Thailand, Vietnam, Indonesia and the Philippines are growth targets.  

Heightened demand comes amid a drop in warehouse vacancy in major Asia Pacific markets to less than  4% in Q2 2021. Net warehouse absorption in major Asian markets also reached its highest first-half  figure on record at 35.6 million sq ft in H1 2021. 

Underpinning these expansion plans, occupiers are optimistic about the operating environment, with  84% expecting significant or moderate improvement over the next three years. Their optimism is  supported by the logistics sector’s resilient performance throughout the pandemic, fueled by accelerating  e-commerce expansion, growing omnichannel retail and increased supply-chain requirements, such as  maintaining additional inventory, or safety stock. 

“The pandemic has helped to hasten the pace of e-commerce growth and changed consumer buying  behaviours, in turn shaping the logistics landscape of tomorrow. Networks that rely on more direct and  near-urban connection points are supplanting traditional multi-tier systems. This means that logistics  property expansion in the next few years will be characterised by more demand for capacity closer to  end-customers as shorter delivery times become increasingly crucial in an omnichannel era,” said Troy  Shortell, Head of Supply Chain Advisory, Asia, at CBRE. 

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