How APAC’s logistics hubs are evolving amid supply-chain rewiring, new occupier specs, and cross‑border flows
30 Apr 20266 min read
Summary
- The market is moving away from broad expansion toward selective, higher-quality development, with demand focused on modern, automation-ready facilities and tighter alignment between supply and occupier needs.
- Rerouted trade flows, resilience strategies, and evolving occupier requirements are reshaping where and how logistics space is used, strengthening key hubs while accelerating the rise of specialized secondary nodes.
- Investors remain active but more selective, prioritizing micro-location, tenant quality, and next-generation infrastructure, particularly in logistics and data centres aligned with long-term digital and trade trends.
Asia Pacific’s industrial and logistics (I&L) footprint is in the midst of a strategic reset. The market is entering a more disciplined phase, defined by higher-specification and automation driven logistics development. As monetary policy eases and consumer confidence gradually improves, demand is shifting to modern logistics space designed to support technology adoption and workflow efficiency, even as several markets work through a supply overhang. In short, the region is rebalancing, with Singapore and India anchoring outperformance while parts of North Asia absorb elevated vacancy and developers pivot to more pre‑commitment‑led pipelines.
Across APAC, developers have shifted to risk-averse strategies, moderating new starts and prioritizing pre-commitments, especially in markets where the 2023–2025 construction waves lifted vacancy. Over 7.7 million sqm of new I&L space was delivered across monitored markets in H1 2025, but the cycle timing is uneven. Vacancy has risen in Greater Tokyo with over 1.3 million sqm delivered, while Sydney and Melbourne remain comparatively tight. Several Mainland China cities have slowed development to allow elevated vacancy to normalise.
Leasing demand has moderated in select markets, but remains buoyant where domestic consumption and supply‑chain reconfiguration are strongest. India posted a 32.3% year-on-year jump in H1 2025 gross take‑up, while Singapore’s demand surged 133% year-on-year as new supply was absorbed, evidence that quality stock in the right submarkets can still lease briskly even in a rebalancing phase.
For 2026, Colliers expects occupancy to stabilise or improve in markets where supply pipelines are easing, notably Australia, Japan and Singapore, supporting a broadly positive rental outlook, albeit with ongoing pressure wherever supply and demand imbalances persist.
A clear ‘flight to quality’ is reshaping location and building choices across the region. Third party logistics and e-commerce continue to lead absorption, but their requirements have moved up the specification curve. They are seeking higher clear heights, larger floorplates, heavy floor loading, greater power density, and layouts that support automation and value-added services. In Singapore, demand has been strongest for modern ramp-up stock, with a shortage of large-plate, high-clear-height units a binding constraint.
In Japan, labour access has become the decisive factor. Occupiers are prioritising single-floor, air-conditioned facilities in suburban locations with superior workforce accessibility often accepting higher rents to secure productivity and retention. The 2023 supply surge left Tokyo’s vacancy higher than normal, but specifications are evolving fast as automation adoption accelerates.
This qualitative shift matters for owners of legacy stock. Older assets across APAC are relying more on incentives, shorter leases, and capex-backed upgrades to stay relevant, while modern, energy-efficient facilities command premium rents and tighter downtime between leases.
Tariff risk and the push for supply-chain resilience are quietly redrawing routing maps. Singapore’s position as a tariff-efficient, compliance-reliable trans-shipment hub has strengthened, with Colliers noting tariff-related rerouting of regional shipments through Singapore, alongside tailwinds from AI-driven electronics and firm U.S. consumption. This confluence continues to support logistics and high-spec manufacturing demand.
On the ground, Singapore’s metrics illustrate a market re-pricing to quality. Average prime logistics rents sat around S$1.77 per sq. ft. in Q4 2025, with overall vacancy at 11.3% as supply tapered. With no new multi-tenant warehouse space for lease expected until 2027, prime vacancy should tighten, and 2026 rental growth is poised to re-accelerate, albeit in a more cost-conscious, efficiency-driven environment.
Across APAC, developers have shifted to risk-averse strategies, moderating new starts and prioritizing pre-commitments, especially in markets where the 2023–2025 construction waves lifted vacancy. Over 7.7 million sqm of new I&L space was delivered across monitored markets in H1 2025, but the cycle timing is uneven. Vacancy has risen in Greater Tokyo with over 1.3 million sqm delivered, while Sydney and Melbourne remain comparatively tight. Several Mainland China cities have slowed development to allow elevated vacancy to normalise.
Leasing demand has moderated in select markets, but remains buoyant where domestic consumption and supply‑chain reconfiguration are strongest. India posted a 32.3% year-on-year jump in H1 2025 gross take‑up, while Singapore’s demand surged 133% year-on-year as new supply was absorbed, evidence that quality stock in the right submarkets can still lease briskly even in a rebalancing phase.
For 2026, Colliers expects occupancy to stabilise or improve in markets where supply pipelines are easing, notably Australia, Japan and Singapore, supporting a broadly positive rental outlook, albeit with ongoing pressure wherever supply and demand imbalances persist.
A clear ‘flight to quality’ is reshaping location and building choices across the region. Third party logistics and e-commerce continue to lead absorption, but their requirements have moved up the specification curve. They are seeking higher clear heights, larger floorplates, heavy floor loading, greater power density, and layouts that support automation and value-added services. In Singapore, demand has been strongest for modern ramp-up stock, with a shortage of large-plate, high-clear-height units a binding constraint.
In Japan, labour access has become the decisive factor. Occupiers are prioritising single-floor, air-conditioned facilities in suburban locations with superior workforce accessibility often accepting higher rents to secure productivity and retention. The 2023 supply surge left Tokyo’s vacancy higher than normal, but specifications are evolving fast as automation adoption accelerates.
This qualitative shift matters for owners of legacy stock. Older assets across APAC are relying more on incentives, shorter leases, and capex-backed upgrades to stay relevant, while modern, energy-efficient facilities command premium rents and tighter downtime between leases.
Tariff risk and the push for supply-chain resilience are quietly redrawing routing maps. Singapore’s position as a tariff-efficient, compliance-reliable trans-shipment hub has strengthened, with Colliers noting tariff-related rerouting of regional shipments through Singapore, alongside tailwinds from AI-driven electronics and firm U.S. consumption. This confluence continues to support logistics and high-spec manufacturing demand.
On the ground, Singapore’s metrics illustrate a market re-pricing to quality. Average prime logistics rents sat around S$1.77 per sq. ft. in Q4 2025, with overall vacancy at 11.3% as supply tapered. With no new multi-tenant warehouse space for lease expected until 2027, prime vacancy should tighten, and 2026 rental growth is poised to re-accelerate, albeit in a more cost-conscious, efficiency-driven environment.
Southeast Asia’s rising nodes: diversification and specialization
Indonesia is emerging as a dual-track story. Industrial estates are attracting relocations and expansions notably from Chinese manufacturers, while data centres and EV-related ecosystems are catalysing growth corridors east of Jakarta, reinforced by the Patimban Port. Limited new supply in Greater Jakarta and investor interest in estates underscore forward momentum.
The Philippines is actively positioning to benefit from the China plus one strategy. Reforms aimed at improving the investment environment including streamlined approval of ‘green lanes’, tax payment facilitation, and amendments to the Foreign Investments Act are helping to shorten set‑up timelines for manufacturers. Longer land lease terms for strategic investments complement rising occupier interest from electronics, medical instruments, automotive (including EV components), and semiconductors pointing to higher-value industrial inflows, even as near-term rent trends reflect an incoming supply wave.
Across the broader region, we see industrial clusters specializing, from cold-chain and pharma-grade facilities in trade-heavy city-states and EV supply-chain and port-proximate parks in Indonesia and Thailand, to high-tech manufacturing-linked warehousing in Taiwan and omni-channel fulfilment nodes close to large consumer pools in India and Australia. This specialization improves resilience and shortens lead times, but it also raises the bar for specification and operations.
The Philippines is actively positioning to benefit from the China plus one strategy. Reforms aimed at improving the investment environment including streamlined approval of ‘green lanes’, tax payment facilitation, and amendments to the Foreign Investments Act are helping to shorten set‑up timelines for manufacturers. Longer land lease terms for strategic investments complement rising occupier interest from electronics, medical instruments, automotive (including EV components), and semiconductors pointing to higher-value industrial inflows, even as near-term rent trends reflect an incoming supply wave.
Across the broader region, we see industrial clusters specializing, from cold-chain and pharma-grade facilities in trade-heavy city-states and EV supply-chain and port-proximate parks in Indonesia and Thailand, to high-tech manufacturing-linked warehousing in Taiwan and omni-channel fulfilment nodes close to large consumer pools in India and Australia. This specialization improves resilience and shortens lead times, but it also raises the bar for specification and operations.
Capital flows: investors lean into I&L plus data centres
Investor appetite remains robust for logistics, even as underwriting becomes more granular, with greater emphasis on micro-location—the precise site-level advantages such as access to transport infrastructure, labour, and distribution routes—and tenant covenant, or the financial strength and creditworthiness of occupiers underpinning lease stability. Colliers’ 2026 Global Investor Outlook highlights a decisive shift of global capital toward APAC, with I&L among the top two preferred sectors region-wide; data centres are a major focus for cross-border capital especially in Singapore, Australia and India as power, connectivity and latency needs soar.
Outlook: a more disciplined, more digital cycle
As APAC’s I&L sector rebases, the through-line is disciplined. Developers will stay selective, occupiers will pay for precision, and investors will differentiate by marrying core locations with next-generation specifications. If 2025 was about rebalancing, 2026 looks set to be about execution. This means getting the right assets into the right nodes, wired for automation, backed by resilient trade lanes and ready for the next decade of growth.
About Gavin Bishop
Gavin brings more than 26 years’ experience in the Industrial market to the team, focusing solely on Industrial Capital Markets and large land transactions. Gavin has sold over $5.62 billion in industrial investments in the last 3-years alone and enjoys a 70% market share in NSW compared to all other industrial agents. His deep relationships with global & domestic institutional investment clients which has enabled Gavin to not only connect with all relevant parties, but ultimately, provide the best possible outcome for his clients.