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CBRE’s 2023 Asia Pacific Logistics Occupier Survey found that 68% of logistics occupiers intend to expand their warehouse portfolios in the next three years, down from 78% in the 2021 survey.
Absorption in mainland China has improved from last year’s low base but the recovery has lagged CBRE’s forecasts.
Despite a stable volume of requirements from 3PLs, e-commerce demand is weakening and international trade is weak. Logistics leasing momentum in Asia Pacific moderated over the course of H1 2023, with CBRE expecting a further weakening in expansionary demand over the reminder of the year.
Mid-year review
Leasing demand from e-commerce platforms is expected to slow this year as sales growth moderates. Cost saving concerns will prompt more occupiers to outsource logistics operations to 3PLs. While supply chain bottlenecks have now eased, the diversification of sourcing and manufacturing will continue, benefiting Southeast Asia and India.
Forecast made in January 2023
Demand to Normalise
Forecast Accuracy
Vacancy in Asia rose over the course of H1 2023 and is expected to increase further in the second half of the year as supply peaks. Singapore and the Pacific remain landlord’s markets, with over half of the pipeline in the next 18 months having already been pre-leased.
Mid-year review
New supply is forecasted to increase in 2023 as supply chain disruption-induced project delays finally come to an end. Vacancy in Asia will rise while that in the Pacific will stay tight. Incentives could increase as landlords focus on shoring up occupancy.
Forecast made in January 2023
IMPROVING SPACE AVAILABILITY
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Rents continue to diverge. While nearly all Asian markets are struggling to record growth amid the very large supply pipeline, the Pacific and Singapore (Prime) are seeing strong gains.
Rental growth in Asia is expected to remain modest as incentives creep up due to mounting vacancy. In Greater Seoul, landlords will keep face rents stable while offering more incentives.
Momentum in Singapore (prime) and the Pacific will moderate over the next 18 months as occupiers turn more cost-conscious and become reluctant to commit to new space at current rents.
Mid-year review
Rental growth is projected to slow to sub-3% for mature Asia (ex. Singapore prime). Markets in the Pacific will continue to lead with high single-digit growth.
Forecast made in January 2023
SLOWER RENTAL GROWTH
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Forecast Accuracy