What will define the future of industrial real estate in APAC?

Analysts project a $1 trillion manufacturing boom.

Asia Pacific's manufacturing revolution is reshaping industrial real estate requirements as four key growth industries will rely on sophisticated facilities to support future demand.

According to a new report from global real estate services firm JLL, the rapid growth of the semiconductors, automotive, pharmaceuticals and biotechnology, and renewable energy equipment industries, collectively seen as part of a projected $1 trillion manufacturing industry boom*, have resulted in evolving requirements for industrial real estate.

Here’s more from JLL:

JLL analysis reveals that these industries now have requirements far beyond traditional warehouse and manufacturing spaces including large-scale facilities, specialised infrastructure and equipment, higher building specifications, and other technical considerations due to the complexity of their production processes.

"Advanced manufacturing will define the next chapter of Asia Pacific’s industrial real estate narrative. We're witnessing a structural transformation where advanced manufacturing is demanding industrial facilities that function more like high-tech laboratories than conventional factories. This evolution is creating both challenges and opportunities for industrial landlords who must adapt to meet increasingly complex tenant requirements,” said Elizabeth Low, Director of Research, Asia Pacific at JLL.

JLL research identifies 11 critical requirements driving the industrial real estate evolution, with all four growth industries requiring large floor plates, heavy floor loading capacity, and enhanced fire protection systems. Semiconductor and pharmaceutical facilities additionally demand ISO-classified cleanrooms and specialized HVAC systems with components such as HEPA and ULPA filters.

Floor loading requirements have intensified dramatically, with typical specifications ranging from 3-7 tons per square meter, escalating to 10 tons or higher for automotive and renewable energy equipment manufacturing. Clear height requirements now commonly exceed 8 meters, reaching up to 25 meters or higher for renewable energy component assembly.

Power infrastructure has become particularly critical as these energy-intensive industries require substantial electrical capacity. Semiconductor fabrication facilities, automotive plants with robotic assembly lines, and battery production facilities all demand high-capacity electrical systems that exceed standard industrial specifications.
Furthermore, the specialized nature of these requirements is driving longer lease terms and the increased prevalence of build-to-suit arrangements. The enhanced specifications often result in higher development costs but create opportunities for landlords to command premium rents while securing long-term tenant relationships in high-value manufacturing sectors.

"As manufacturers continue adopting China+N strategies and supply chain diversification, industrial real estate providers across the region must prepare for increasingly sophisticated tenant requirements that will define the next generation of manufacturing facilities. These industries represent attractive, sticky tenants for industrial landlords, but they come with significantly more complex operational requirements," said Ben Horner, Executive Director, Industrial & Logistics, Asia Pacific at JLL.

Asia Pacific dominates global manufacturing across these growth sectors, with the region accounting for over 60% of global semiconductor revenue and 74% of new renewable energy capacity additions in 2024. China leads multiple categories while Taiwan specializes in advanced semiconductors, South Korea leverages technological sophistication, and emerging markets like India and Southeast Asia capitalize on competitive advantages to attract diverted manufacturing investments.