Asia-Pacific logistics rents slow sharply to 0.2% in 2024, down from 7.0% in 2023: Knight Frank
13 Feb 20254 min read
Summary
- Knight Frank’s Asia-Pacific H2 2024 Logistics Highlights report reveals that logistics rent growth across the region slowed sharply to 0.2% in 2024, down from 7% in 2023, reflecting the sector’s adjustment to excess supply and global uncertainty. While 14 of 17 tracked cities maintained stable or rising rents, markets in mainland China faced steep declines, with Beijing and Shanghai rents plunging up to 15% amid a significant development pipeline and rising vacancy rates.
- Conversely, markets such as Melbourne and Greater Kuala Lumpur demonstrated resilience, posting rental growth of 6.7% and 5%, respectively, due to land constraints and new premium industrial developments. Knight Frank noted that Southeast Asia and India are poised to benefit from manufacturers’ accelerating “China-plus” diversification strategies, particularly as potential tariff increases under a renewed Trump administration reshape global supply chain dynamics.
- Looking to 2025, Knight Frank expects the Asia-Pacific logistics sector to remain balanced, supported by occupiers optimizing footprints and sustained demand for modern, well-located facilities. Vacancy rates are projected to stay stable, with moderate rent growth of up to 2%, driven by a continued flight to quality, particularly in strategic industries such as electric vehicles and electronics.
Singapore, February 13, 2025 - Knight Frank, a leading global real estate consultancy, today released its Asia-Pacific H2 2024 Logistics Highlights report, revealing a sector at a crossroads amid geopolitical uncertainties and evolving market dynamics in Asia Pacific logistics rents.
While 14 of 17 tracked cities recorded stable or increasing rents year on year in H2 2024, the report unveils a stark contrast in regional performance. Overall rent growth for logistics spaces in Asia-Pacific slowed to just 0.2% in 2024, down sharply from 7% in 2023 and 2% in the first half of 2024.
This deceleration, however, masks significant market variations across the region. Markets in the Chinese mainland face headwinds, with Beijing and Shanghai experiencing 14% to 15% rent plunges due to a substantial development pipeline, which is expected to reach over 4 million sqm. The considerable development pipeline will lift vacancy rates in both cities to nearly 30% in 2025, exerting considerable downward pressure on Asia Pacific logistics rents.
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