Logistics Growth in the Asia-Pacific: Long-Term Vision Amidst Volatility
Introduction to Market Sentiment
In recent developments, logistics occupiers across the Asia-Pacific region are showing a remarkable determination to adapt despite experiencing short-term market volatility. According to a survey conducted by CBRE, as reported on August 4, 2023, a significant 76% of logistics occupiers are planning to expand their real estate footprint within the next three to five years. This data reflects a broader optimism regarding the medium to long-term outlook for the logistics sector, even in the face of changing trade scenarios and heightened uncertainty.
Understanding the Survey Findings
The findings from the 2025 Asia-Pacific Logistics Occupier Survey, based on insights from over 380 companies across the region, highlight a decisive shift in mindset among logistics occupiers. While near-term business confidence has taken a hit—with only 69% expecting business performance to improve over the next two years, down from 81% in the previous year—occupiers are clearly aligning their strategies for long-term growth.
Emerging Markets on the Horizon
Interestingly, the survey indicates that many occupiers are diversifying their interests beyond well-established markets. India and the Middle East have emerged as prime focus areas for expansion, driven by the need to reduce over-reliance on a single market. This sentiment was echoed in the findings, showcasing a pivot towards supply chain diversification as businesses adapt to shifting global dynamics.
In Southeast Asia, Singapore has emerged as a noteworthy market, ranking second to Vietnam for expansion interest. Graeme Bolin from CBRE highlighted Singapore’s status as a strategically located logistics hub, underscoring its stable operating environment. Global occupiers are drawn to Singapore, recognizing its reliability and connectivity as they navigate the complexities of the current global landscape.
Assessing the Near-Term Outlook
Despite the optimistic long-term visions, the near-term outlook remains subdued. Various factors, including trade uncertainties, are weighing heavily on business confidence. Respondents from the survey expressed that increasing tariff complexities have left them grappling with how to shape their portfolios. Some of the reported mitigation measures include potential consolidation, renegotiation of leases, and postponement of expansion plans.
In particular, third-party logistics platforms are feeling the brunt of this volatility, leading them to consider downsizing, as opposed to manufacturing-related occupiers, who generally opt to use self-owned warehouses and can better navigate real estate risks.
Regional Sentiment Mixed, But India Shines Brightly
Sentiment across the Asia-Pacific is not uniform. Businesses in mainland China are predominantly cautious due to potential impacts from aggressive U.S. trade policies, with around 70% of Chinese respondents identifying trade uncertainty as their principal challenge. Conversely, logistic occupiers in India expressed robust confidence, with more than 80% expecting improved performance over the next two years. This optimism stems from India’s ongoing growth phase in the logistics sector, which still lags behind China in logistics space per capita and overall performance.
Supply Trends in Singapore
As the logistics landscape evolves, Singapore stands to gain significantly from the changing trade dynamics. Recent analyses indicate a substantial surge in industrial space supply, projected to reach approximately 1.3 million square metres by the end of 2027. This is a far cry from the previous three years’ average, wherein the supply per year floated around 0.9 million square metres, with a demand of only 0.6 million.
Nicolas Menville from Colliers has pointed out that, despite the influx of new supply, Singapore’s reputation as a trusted regional hub will likely serve it well, particularly for high-value occupiers looking for operational stability.
The Shadow of External Factors on Growth
Nevertheless, Singapore’s strong export-reliant economy comes with its own set of vulnerabilities concerning external factors, particularly in light of potential U.S. tariffs that impact key sectors like semiconductors and pharmaceuticals. While the general sentiment may be stable, analysts have cautioned against complacency, noting that rental growth may encounter moderation in the upcoming quarters due to easing export demands and tariff impacts.
Resilience Amidst Uncertainty
Despite these challenges, the overarching sentiment within Singapore’s industrial market remains one of resilience. Catherine He from Colliers emphasizes that the current environment may harbor risks, but it also presents unique opportunities, especially in specialized logistics and high-tech industrial formats.
As stakeholders in logistics navigate through these complex dynamics, the upcoming years are poised to not only challenge existing paradigms but also foster innovation and adaptability within the sector.