Occupiers’ appetite for Asia Pacific warehouse space slightly weaker than in 2021: CBRE

Despite ongoing economic uncertainty, a new survey by CBRE has found that logistics occupiers in Asia Pacific (APAC) intend to widen their warehouse portfolio. This focus is on high-quality facilities located in prime areas near customers and public transport. 68% of survey respondents plan to acquire and occupy more warehouse space over the next three years, however this is a weaker sentiment compared to previous years, likely due to the spike in demand caused by the e-commerce boom and supply-chain disruptions during the pandemic.

The survey report states that, “As Covid-19 has become endemic and supply chain pressure eases, occupiers’ focus has shifted from space acquisition to operational efficiency enhancements.” This is being driven by omnichannel retailers, manufacturers and third-party logistics service providers as well as rising take-up from high-value-added industries such as electronics, automotive, semiconductors and life sciences.

High-quality logistics facilities in core locations such as near customers and easily accessible to public transport remain the most attractive asset. Occupiers are also willing to pay more for better locations in order to mitigate the increase in transportation costs and potential disruption. Over half of the survey respondents, or 56%, prefer such assets.

Warehouse automation is the top measure for enhancing supply chains, with functional logistics properties sought after such as those with higher ceilings, large numbers of loading bays and reliable power supply. Ada Choi, head of occupier research, Asia Pacific, for CBRE comments, “The growing use of warehouse automation across Asia Pacific is a clear indication that occupiers are striving to boost efficiency while addressing rising labour costs.” She added, “In addition, occupiers are increasingly prioritising future-proof facilities, such as green energy supply and electric-vehicle charging stations, reflecting a broader commitment to sustainability.”

Located in close proximity to Singapore’s Orchard Road and Boat Quay, Zion Road Condo offers a perfect blend of luxurious living and convenience. Situated in the vibrant River Valley neighbourhood, the condominium offers an array of amenities such as well-equipped gymnasium, tennis court, swimming pool, and garden. In addition, Zion Road Condo boasts of a practical and sophisticated integrated transportation network connecting the condominium to various parts of Singapore; all this makes the living experience of its dwellers extremely convenient.

Logistics remains the most preferred asset class among investors in APAC, according to CBRE’s global head of investor thought leadership and APAC head of research, Henry Chin. However, he noted that “in light of the current slowing yield expansion, investors may consider monetising earlier investments…to realise profits and take advantage of current market conditions.”