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Occupiers’ appetite for Asia Pacific warehouse space slightly weaker than in 2021: CBRE

/ Edge Singapore |

July 12, 2023 11:26 AM SGT

CBRE’s survey found that 68% of respondents plan to acquire and occupy more warehouse space over the next three years, lower than the 78% recorded in 2021 (Picture: Samuel Isaac Chua/The Edge Singapore)

SINGAPORE (EDGEPROP) - A new survey by CBRE has found that despite ongoing economic uncertainty, logistics occupiers in Asia Pacific (Apac) intend to widen their warehouse portfolio, with a focus on high-quality facilities located in prime areas near customers and public transport.

However, expansionary sentiment has weakened compared to previous years. The survey, which polled 120 companies across Apac, found that 68% of respondents plan to acquire and occupy more warehouse space over the next three years, lower than the 78% recorded in 2021. CBRE attributes this to a moderation in demand following a spike caused by the e-commerce boom and supply-chain disruptions during the pandemic.

“As Covid-19 has become endemic and supply chain pressure eases, occupiers’ focus has shifted from space acquisition to operational efficiency enhancements,” the survey report states.

In any case, demand remains supported by omnichannel retailers, manufacturers and third-party logistics service providers. In addition, many markets have seen rising take-up from companies in high-value-added industries such as electronics, automotive, semiconductors and life sciences that are expanding their logistics footprint in order to diversify supply chains.

High-quality logistics facilities in core locations remain the most sought-after assets. Over half of the survey respondents, or 56%, prefer logistics assets that are near customers and accessible to public transport. Occupiers are also 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 new and functional logistics properties with higher ceilings, large numbers of loading bays and reliable power supply being the most sought-after options.

“The growing use of warehouse automation across Asia Pacific is a clear indication that occupiers are striving to boost efficiency while addressing rising labour costs,” says Ada Choi, head of occupier research, Asia Pacific, for CBRE. “In addition, occupiers are increasingly prioritising future-proof facilities, such as green energy supply and electric-vehicle charging stations, reflecting a broader commitment to sustainability.”

For investors in Apac, while logistics continues to be the most preferred asset class, interest is “not as strong” compared to three months ago, says Henry Chin, CBRE’s global head of investor thought leadership and Apac head of research. “In light of the current slowing yield expansion, investors may consider monetising earlier investments, particularly those with limited potential for asset enhancement, to realise profits and take advantage of current market conditions,” he adds.

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