Asia Pacific Logistics Occupiers Plan to Expand Warehouse Portfolio: CBRE Survey

Occupiers generally optimistic and planning to expand, showing a preference for modern logistics properties

Singapore – 19 July 2023 – Logistics occupiers in Asia Pacific plan to expand their warehouse portfolio in the next three years, with a focus on high-quality facilities located in prime areas near customers and public transport, according to a new CBRE survey. 

The survey of 120 companies across Asia Pacific found that 81% are confident about their business outlook, and 68% plan to acquire and occupy more space over the next three years. This 68% is however slightly down from 78% in 2021, as the pandemic-induced spike in demand for logistics has moderated. Occupiers are now focusing on enhancing operational efficiency, while maintaining a strong appetite for logistics space. 

While most occupiers are concentrating on established and home markets, omnichannel retailers, manufacturers, and third-party logistics service providers are the key drivers of demand for logistics space. High value-added industries like electronics, semiconductors, and life sciences are also expanding their logistics footprints in the region to diversify their supply chains. 

More than half (56%) of respondents prefer logistics assets that are near customers and accessible to public transport. Occupiers are willing to pay more for better locations to mitigate the increase in transportation costs and potential disruption. 

Warehouse automation is identified as the top measure to enhance supply chains, with the most sought-after technologies being Automated Storage and Retrieval Systems (AS/RS), and Autonomous Guided Vehicles. Other considerations include green features, such as installation of rooftop solar photovoltaic systems to generate clean energy on-site, as well as electric vehicle charging stations. 

“The growing use of warehouse automation suggests a desire to boost efficiency while addressing rising labour costs” said Graeme Bolin, CBRE Head of Occupier and Leasing, Industrial and Logistics Services, Singapore. “In addition, occupiers are showing an increased preference for modern or institutional grade logistics properties with higher ceilings, large numbers of loading bays, and reliable power supply.”

Short-term leases and/or flexibility for expansion is the most important element of future lease management for nearly half of respondents (49%), followed by early termination clause (44%), and renewal options (42%). Occupiers are eager to assemble more agile real estate portfolios to meet short-term demand in view of prolonged macroeconomic uncertainty and ongoing supply chain complexity.

Tricia Song, CBRE Head of Research, Singapore and Southeast Asia, further shared, “It is unsurprising that the survey revealed that occupiers in Singapore reported an ongoing reliance on 3PL’s distribution networks due to limited supply. In our recent Q2 2023 Figures Report, occupancy for our CBRE Research prime logistics basket in Singapore remained close to full. Correspondingly, prime logistics rentals have grown by 8.6% in H1 2023 due to the limited supply, despite the uncertain economic conditions. Barring any unexpected shocks, the rental outperformance of prime logistics is expected to continue in the near term.”

To read the full report, click here.


Notes to editors

CBRE’s 2023 Asia Pacific Logistics Occupier Survey was conducted from April to May 2023. More than 120 responses were received across Asia Pacific.