Report: Logistics space rental rates in major SEA cities to stay high amid pipeline supply increase in 2025
8 Aug 20243 min read
Summary
- Logistics space rental rates across major Southeast Asian cities are projected to stay elevated through 2025 despite new supply, according to Knight Frank’s latest report. Singapore led the region with a 6.7% half-year increase and 10.8% annual growth, marking the highest rise in Asia-Pacific in a decade.
- Manufacturing expansion continues to drive Singapore’s rental surge as global companies shift operations outside China amid trade tensions and economic headwinds. The country’s Purchasing Manager’s Index remains in expansionary territory, signaling sustained confidence among international manufacturers.
- Vietnam’s Southern Key Economic Region and Manila also recorded strong growth, supported by infrastructure spending and demand for cold storage facilities. In contrast, Kuala Lumpur, Bangkok and Jakarta saw stable conditions with minimal changes in logistics rental growth.
Rental rates for logistics spaces in major Southeast Asian (SEA) cities Singapore, Kuala Lumpur, Bangkok, Jakarta, Manila and the Vietnam Southern Key Economic Region (SKER) are expected to remain high in 2025, even with an increase in pipeline supply, global real estate consultant firm Knight Frank said Wednesday, Aug. 7.
Vietnam SKER includes Ho Chi Minh City and provinces of Long An, Dong Nai, Binh Duong and Ba Ria-Vung Tau.
Vietnam SKER includes Ho Chi Minh City and provinces of Long An, Dong Nai, Binh Duong and Ba Ria-Vung Tau.
Singapore Leads SEA in Logistics Rent Growth
In its 28-page “Asia-Pacific (APAC) H1 2024 Logistics Highlights,” Knight Frank reported that Singapore recorded 6.7% growth in logistics space rentals from six months ago and 10.8% year-on-year.
This is the highest growth recorded in APAC in 10 years, the real estate consultancy firm said.
Manufacturing is said to be the key driver of logistics space rent growth in Singapore.
The surge in demand for high-quality logistics spaces in the manufacturing sector is part of a larger-scale effort by companies to relocate their manufacturing operations outside China amid rising trade tensions with the Global West and economic challenges.
This is the highest growth recorded in APAC in 10 years, the real estate consultancy firm said.
Manufacturing is said to be the key driver of logistics space rent growth in Singapore.
The surge in demand for high-quality logistics spaces in the manufacturing sector is part of a larger-scale effort by companies to relocate their manufacturing operations outside China amid rising trade tensions with the Global West and economic challenges.
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“The overall Singapore Purchasing Manager’s Index remained in expansionary territory at mid-year, as international manufacturers continue to see the island as a potential manufacturing location to expand operations,” Knight Frank said in its report.
Vietnam SKER and Manila see strong rental growth
On average, logistics space rentals across SEA grew by 2.5% from six months ago.
The Knight Frank report indicated that, in addition to Singapore, key SEA cities like Vietnam SKER and Manila also recorded significant growth in logistics space rentals. Vietnam SKER saw a 5.2% increase in rentals over the past six months and a 9.9% rise year-on-year, while Manila experienced a 1.7% half-yearly growth and a 9.9% year-on-year increase.
The Knight Frank report indicated that, in addition to Singapore, key SEA cities like Vietnam SKER and Manila also recorded significant growth in logistics space rentals. Vietnam SKER saw a 5.2% increase in rentals over the past six months and a 9.9% rise year-on-year, while Manila experienced a 1.7% half-yearly growth and a 9.9% year-on-year increase.
Source: Knight Frank Research • Note: Vietnam Southern Key Economic Region (SKER) includes Ho Chi Minh City and provinces of Long An, Dong Nai, Binh Duong and Ba Ria-Vung Tau
The Knight Frank report indicated that, in addition to Singapore, key SEA cities like Vietnam SKER and Manila also recorded significant growth in logistics space rentals. Vietnam SKER saw a 5.2% increase in rentals over the past six months and a 9.9% rise year-on-year, while Manila experienced a 1.7% half-yearly growth and a 9.9% year-on-year increase.
The real estate consultancy firm said Manila’s logistics space rental growth is due to the increasing demand for cold storage facilities.
In April, Ayala Land Inc.’s logistics unit said it will double its cold storage capacity in 2025. Such move comes months after the Philippines’ agriculture department announced it will construct more cold storage facilities in Taguig City.
The Cold Chain Association of the Philippines reported that the country’s cold chain industry grew by 10% in 2022. This growth has attracted interest from Taiwan, which is now looking to tap into the expanding market in the Philippines.
Infrastructure development, e-commerce growth and manufacturing expansion, meanwhile, are drivers to Vietnam SKER’s stable logistics space rent growth, Knight Frank said in its report.
6% of Vietnam’s GDP is allocated to infrastructure, showing the country’s interest in supporting its fast-paced economic growth.
In June, Vietnam began the construction of the $433 million Huu Nghi-Chi Lang section, the final stage of the $59 billion megaproject North-South expressway.
Meanwhile, Kuala Lumpur, Bangkok and Jakarta recorded little to no significant changes in their logistics rental growth rate.
The real estate consultancy firm said Manila’s logistics space rental growth is due to the increasing demand for cold storage facilities.
In April, Ayala Land Inc.’s logistics unit said it will double its cold storage capacity in 2025. Such move comes months after the Philippines’ agriculture department announced it will construct more cold storage facilities in Taguig City.
The Cold Chain Association of the Philippines reported that the country’s cold chain industry grew by 10% in 2022. This growth has attracted interest from Taiwan, which is now looking to tap into the expanding market in the Philippines.
Infrastructure development, e-commerce growth and manufacturing expansion, meanwhile, are drivers to Vietnam SKER’s stable logistics space rent growth, Knight Frank said in its report.
6% of Vietnam’s GDP is allocated to infrastructure, showing the country’s interest in supporting its fast-paced economic growth.
In June, Vietnam began the construction of the $433 million Huu Nghi-Chi Lang section, the final stage of the $59 billion megaproject North-South expressway.
Meanwhile, Kuala Lumpur, Bangkok and Jakarta recorded little to no significant changes in their logistics rental growth rate.
Source: Knight Frank Research