APAC logistics rents record modest 0.2% growth in 2025

Singapore led growth in the region.

Logistics rents across the Asia-Pacific region rose 0.2% in 2025, with the second half of the year posting a slightly stronger 0.3% increase, according to Knight Frank’s Asia-Pacific H2 2025 Logistics Highlights. While headline growth was modest, Singapore emerged as a standout market, with rents climbing more than 7% in H2 2025, driven by strong demand from manufacturers and third-party logistics (3PL) providers seeking specialised facilities amid tight supply conditions.

Across the region, 3PLs, e-commerce players, and manufacturing occupiers continued to anchor leasing demand in the second half of the year. Heightened tariff uncertainty has accelerated "China+n" strategies, with companies exploring diversified logistics footprints across Southeast Asia and India to hedge cross-border risks. 

Knight Frank highlighted that occupiers are increasingly taking up space in phases rather than committing to large requirements upfront, reflecting a strategic shift toward flexibility as trade policies remain fluid. With pipeline supply in 2026 expected to remain elevated, regional rental growth is anticipated to stay largely below 2% across most markets.

Tim Armstrong, Global Head of Occupier Strategy and Solutions at Knight Frank, noted, “While US trade policies will remain fluid in 2026, occupiers are expected to gradually adapt to structural uncertainty, moving beyond short-term tariff workarounds toward longer-term supply chain strategies. Supplier diversification, higher inventory buffers, and friend-shoring will continue to shape logistics demand, supporting resilient leasing activity.” Armstrong also highlighted that 3PLs are poised for growth as firms increasingly rely on contract logistics to navigate supply chain complexities while remaining operationally agile.

According to Knight Frank, emerging Southeast Asian and Indian markets posted firmer rental trends in H2 2025, with Greater Ho Chi Minh City seeing rents rise 2.8% over the half-year following new modern warehouse developments in Long An and Dong Nai and robust take-up by regional 3PL operators. 

In Jakarta, broad-based demand came from manufacturers and logistics firms, while container carriers expanded intra-Asian capacity, led by Chinese operators. In India, rents grew 1.5%, driven by manufacturing demand in Bengaluru, Mumbai, and Delhi-NCR and a sustained flight-to-quality toward prime facilities, with over 60% of take-up concentrated in the prime segment.

Conversely, logistics markets in North Asia, particularly Beijing and Shanghai, faced oversupply as large new completions lifted total inventory by more than 15% in 2025, pushing vacancies to 28.3% and weighing on rents, which fell 14.3% year-on-year. Knight Frank attributed this decline to aggressive landlord pricing aimed at maintaining occupancy, while infrastructure upgrades and domestic consumption support are expected to lay the foundation for market stabilization toward the end of 2026.

Christine Li, Head of Research, Asia-Pacific, Knight Frank, said, “As the front-loaded export surge wanes in 2026, headline trade growth in Asia-Pacific is expected to normalize. Still, evolving intra-regional corridors and strengthened trade agreements are likely to sustain demand for modern logistics space across key hubs. Although rental growth will remain restrained, the market is increasingly anchored by sustainable, demand-led fundamentals.”

Knight Frank’s report underscores a strategic shift in the Asia-Pacific logistics sector, where flexibility, supply chain resilience, and selective expansion are driving occupancy, while rental growth remains measured amid elevated supply and trade uncertainties.