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.
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.
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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.
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