Rents in logistics forecasted to grow by 3-5% in 2022 across Asia-Pacific
Asia-Pacific Warehouse Review for H2 2021 which tracked prime warehouse rents across 17 key cities registering a marginal increase of 0.5% year-on-year.
Take-up in the region’s warehouse markets remained robust in the second half of 2021, lifted by resurgent trade flows from the recovery in global demand. As a result, rents for logistics warehouses across Asia-Pacific rose by a marginal 0.5% year-on-year in the same period. Despite close to 9 million sqm of new supply expected to be delivered in the region in 2022, vacancies are likely to remain tight on strong demand and active pre-commitments. While logistics warehouses have benefitted from powerful e-commerce tailwinds, at some point, further growth will have to be sustained by macroeconomic stability in consumption and investment. As a result, the outlook for the logistics sector in 2022 is bifurcated between the developed and emerging markets.
The emergence of the Omicron variant late into 2021 created fresh headwinds for the region. While it has put pressure on supply chains in the short term and constrained trade, which has been a vital engine of growth, it is unlikely to detract from the long-term structural fundamentals that logistics markets in the Asia Pacific enjoy. The current momentum indicates that demand from occupiers in the region still has ample room to run. Rents are tipped for further growth in 2022 but will be challenged by occupiers’ cost sensitivity in certain sectors. The supply imbalance in the region, however, will continually tilt markets in landlords’ favour.
