Asia’s industrial net absorption records highest first quarter total in years
Net absorption in the region reached 15.6m sq ft in Q1 2021.
Industrial sentiment continued to pick up in Q1 2021, as CBRE reported global manufacturing Purchasing Manufacturers Indices (PMI) reached 55 in March, a ten-year high. Warehousing demand remained upbeat, with Asia net absorption totaling 15.6 million sq. ft., the highest first quarter total in recent years. Asia Pacific logistics rents rose by 0.7% q-o-q, the strongest rate of growth since the onset of the pandemic.
According to CBRE, large 3PLs and e-commerce occupiers drove leasing demand this quarter, supported by emerging requirements from a range of alternative industries, including community purchasing platforms, central kitchens, food delivery providers and pharmaceutical companies.
Following the recent Suez Canal obstruction - which caused significant disruption to global supply chains and raised shipping costs for major global shipping companies serving global retailers, e-commerce platforms and manufacturers - occupiers are also revisiting safety stock strategies and increasing inventory levels.
This is expected to drive demand for bonded warehouses, distribution centres and warehouses serving port facilities in the months ahead.