Apac logistics sector sees dampened near-term outlook but long-term growth plans unfazed: CBRE

[SINGAPORE] Logistics occupiers across Asia-Pacific are looking beyond short-term market volatility and planning long-term investments, CBRE survey on Monday (Aug 4) indicated.

The 2025 Asia-Pacific Logistics Occupier Survey found that 76 per cent of the region’s logistics occupiers plan to grow their real estate footprint over the next three to five years.

This signals that optimism towards the medium- to long-term outlook remains intact even as heightened trade uncertainty has weakened near-term outlook, according to the survey, which drew insights from more than 380 companies across Apac between March and April.

The survey also found that occupiers are looking for opportunities beyond established markets, with India and the Middle East coming in as the top Apac markets that have garnered strongest interest over a two-year horizon.

“Robust interest in these markets also indicates a shift toward supply chain diversification as more businesses look to reduce overreliance on a single market,” the survey indicated.

Notably, Singapore emerged as a key market of interest, ranking second behind Vietnam among South-east Asian nations in terms of garnering expansion interest.

Graeme Bolin, head of occupier and leasing, industrial & logistics services, Singapore, at CBRE, said: “Singapore continues to draw global occupiers, thanks to its reputation as a strategically located, neutral, and stable logistics hub.”

This comes as the city state’s reliable operating environment, strong regional connectivity and strategic positioning continue to resonate with logistics tenants as they navigate a complex global environment, the report said.

Near-term outlook dampened, but long-term expansion plans intact

Near-term business confidence has weakened, with 69 per cent of respondents expecting improved business performance over the next two years, down from 81 per cent in 2023, the survey said.

Despite this, appetite for growth over the longer haul remains strong, with occupiers positioning their portfolios for long-term expansion.

In particular, appetite for expansion is evident in emerging markets, with global manufacturing diversifying away from mainland China to India and South-east Asia.

The shift comes as emerging markets benefit from rapid urbanisation and rising per capita spending, which is set to boost online consumption and drive demand for supply chain, warehouse and last mile facilities, the survey noted.

Risk mitigation plans

Occupiers reported struggling to develop comprehensive and concrete plans amid constantly shifting tariff policy, and are actively considering an array of mitigation measures to address risks.

34 per cent are planning to consolidate or downsize, 30 per cent considering renegotiating leases and 30 per cent looking at postponing expansion, the report said.

By business sector, third party logistics platforms are more likely to consolidate and downsize as they are especially sensitive to market volatility, the report noted.

Manufacturing-related occupiers are less susceptible to real estate risks, being more habitual users of self-owned warehouses, making them more likely to postpone expansion plans.

Regional sentiment mixed

Sentiment across Apac is mixed, with cautious sentiment largely driven by respondents in mainland China, who potentially face harsh impacts from tougher US trade policy, the survey indicated.

“Respondents in mainland China are the most cautious, with close to 70 per cent identifying trade uncertainty as their top challenge,” it said.

“Vietnam, Taiwan, Malaysia and Thailand are also susceptible to trade uncertainty due to their dependence on trade with the US, with exports to this market accounting for more than 10 per cent of their respective gross domestic products in 2024,” it added.

Meanwhile, occupiers in India’s displayed robust confidence. More than 80 per cent of respondents from the country expecting improved business performance in the next two years – compared with under 40 per cent from China.

The South Asian nation’s logistics market is in a growth phase, with its logistics space per capita and global logistics performance ranking at around half of that of China, the survey noted.