Apac logistics sector sees dampened near-term outlook but long-term growth plans unfazed: CBRE
India and the Middle East are the top Apac markets that have garnered strongest interest over a two-year horizon
[SINGAPORE] Logistics occupiers across Asia-Pacific are looking beyond short-term market volatility and planning long-term investments, a CBRE survey on Monday (Aug 4) indicated.
The 2025 Asia-Pacific Logistics Occupier Survey found that 76 per cent of the region’s logistics occupiers plan to grow their real estate footprint over the next three to five years.
This signals that optimism towards the medium to long-term outlook remains intact even as heightened trade uncertainty has weakened near-term outlook, according to the survey, which drew insights from more than 380 companies across Apac between March and April.
The survey also found that occupiers are looking for opportunities beyond established markets, with India and the Middle East coming in as the top Apac markets that have garnered strongest interest over a two-year horizon.
“Robust interest in these markets also indicates a shift towards supply chain diversification as more businesses look to reduce over-reliance on a single market,” the survey indicated.
Notably, Singapore emerged as a key market of interest, ranking second behind Vietnam among South-east Asian nations in terms of garnering expansion interest.
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Graeme Bolin, head of occupier and leasing, industrial and logistics services, Singapore, at CBRE, said: “Singapore continues to draw global occupiers, thanks to its reputation as a strategically located, neutral, and stable logistics hub.”
This comes as the city state’s reliable operating environment, strong regional connectivity and strategic positioning continue to resonate with logistics tenants as they navigate a complex global environment, the report said.
Near-term outlook dampened, but long-term ambitions intact
Near-term business confidence has weakened, with 69 per cent of respondents expecting improved business performance over the next two years, down from 81 per cent in 2023, the survey said.
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Despite this, appetite for growth over the longer haul remains strong, with occupiers positioning their portfolios for long-term expansion.
In particular, appetite for expansion is evident in emerging markets, with global manufacturing diversifying away from mainland China to India and South-east Asia.
The shift comes as such markets benefit from rapid urbanisation and rising per capita spending, which is set to boost online consumption and drive demand for supply chain, warehouse and last-mile facilities, the survey noted.
Singapore is also well set to take advantage of the evolving trade landscape despite global uncertainties, said a separate Colliers report on Tuesday.
The logistics and business park segments in the country are expected to support “rental stability” and “healthy occupancy levels”, it detailed. Leasing interest in high-tech multi-user factories and business parks is predicted to strengthen, driven by easing supply pressure and sustained demand from technology, artificial intelligence, and biomedical firms.
Risk mitigation plans
Occupiers reported struggling to develop comprehensive and concrete plans amid constantly shifting tariff policy, and are actively considering an array of mitigation measures to address risks.
Thirty-four per cent are planning to consolidate or downsize, 30 per cent are considering renegotiating leases and 30 per cent are looking at postponing expansion, the report said.
By business sector, third party logistics platforms are more likely to consolidate and downsize as they are especially sensitive to market volatility, the report noted.
Manufacturing-related occupiers are less susceptible to real estate risks, being more habitual users of self-owned warehouses, and are more likely to postpone expansion plans.
Regional sentiment mixed
Sentiment across Apac is mixed, with cautious sentiment largely driven by respondents in mainland China, who potentially face harsh impacts from tougher US trade policy, the survey indicated.
“Respondents in mainland China are the most cautious, with close to 70 per cent identifying trade uncertainty as their top challenge,” it said.
“Vietnam, Taiwan, Malaysia and Thailand are also susceptible to trade uncertainty due to their dependence on trade with the US, with exports to this market accounting for more than 10 per cent of their respective gross domestic products in 2024,” it added.
Meanwhile, occupiers in India displayed robust confidence. More than 80 per cent of respondents from the country expect improved business performance in the next two years – compared with under 40 per cent from China.
The South Asian nation’s logistics market is in a growth phase, with its logistics space per capita and global logistics performance ranking at around half of that of China, the survey noted.
Industrial space supply in Singapore is also set to surge from now until the end of 2027, totalling a supply of approximately 1.3 million square metres. In comparison, the average annual supply and demand across the past three years were about 0.9 million and 0.6 million sq m, respectively.
Nicolas Menville, executive director and head of Singapore-based industrial clients at Colliers, said: “With careful calibration of supply and a strong reputation as a trusted regional hub, Singapore is well-positioned to capture long-term demand from high value occupiers seeking operational stability and supply chain efficiency.”
Nevertheless, the Colliers report warned that Singapore’s trade reliance has exposed it to external factors that could impact rental growth. While Singapore exports will face only a 10 per cent tariff in the United States, analysts have warned that the semiconductor and pharmaceutical sectors are still under threat of further levies.
The Colliers analysis also said that the tariffs’ impact on these sectors, as well as general easing of front-loaded exports to the US, means that sentiment is “cautious” and rental growth will moderate in the coming quarters.
Not all is doom and gloom, however, said Catherine He, head of research at Colliers Singapore.
“Singapore’s industrial real estate market continues to demonstrate resilience in the face of growing global uncertainty,” she noted.
“While near-term risks related to tariffs and global trade may weigh on traditional manufacturing, opportunities could emerge in specialised logistics, bonded storage, and high-tech industrial formats,” she added.
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