Warehousing across Asia-Pacific

Asia-Pacific is an incredibly diverse region in terms of culture, population densities, economic growth drivers, internet usage and above all its political landscape. However, growth in warehousing and logistics is a common theme in this diversity.

Key industrial rental markets in China, Singapore, Vietnam and Japan are all likely to grow between two and seven percent in 2020 (CBRE H1 APAC RE Review).

Across Asia-Pacific, average warehouse lease tenures are getting longer, ranging from six-nine years, or more. Occupier demands and key policy interventions have led to the institutionalisation of warehousing, encouraging more established developers and investors to focus on the sector.

The region is home to a large number of SMEs, many of which are going online to increase their business opportunities. In addition to local strong players in each country, prominent names in the APAC market include DHL, C.H. Robinson Worldwide Inc, DB Schenker, Ceva Logistics, Kuehne + Nagel, DSV, ESR, Alibaba and UPS.


Despite the challenges of COVID-19 and ongoing geopolitical tensions, China still remains one of the world’s most dominant players in the logistics sector due to its global position as a manufacturing hub and the huge demand generated by its population of 1.4bn.

Increasingly sophisticated Chinese logistics and warehousing players are fighting the competition by making huge investments in technologies such as IoT, AI and automation. This trend is driving market consolidation, as the main hubs are able to maximise the benefits of such technologies.  

Hong Kong

Hong Kong is the most expensive place to build warehousing in our global index. Construction costs are high in Hong Kong because commodity prices, for example for coal and metal, are very high. As an island, manufactured goods are imported which results in additional costs for materials.

In addition, the unique high-rise nature of the market is also a factor. Prime warehouses are multi-storey properties with ramp access to each individual floor, which cost more to build than traditional single-storey structures.  

Prices have been driven up further due to the drawn out US-China trade war, which Hong Kong has found itself caught in the middle of. Hong Kong’s logistics industry has particularly suffered, as the city’s position as a transhipment point between China and the world’s consumer markets has started to falter. 

Hong Kong slipped into recession during the protests of late 2019 and has not yet emerged. Struggling retailers have had to reduce their inventory and relinquish warehouse leases. Around one million square feet of logistics space is set to return to the leasing market this year and the vacancy rate is set to double (JLL).

Adding to Hong Kong’s warehousing woes is its comparatively underdeveloped e-commerce industry. High courier charges and the densely populated urban landscape drives a preference for convenience shopping in stores.


Although Singapore is entering recession, the warehouse market has been underpinned so far this year by demand for storage to mitigate against further COVID-19 related supply disruptions, with the stockpiling of essential medical supplies and foodstuffs (C&W).

Despite economic challenges, on-going structural trends, such as the growth of e-commerce, is providing insulation for the logistics sector and industrial property has continued to hold its value.  


India is laggings behind other Asian nations in terms of the quality of its warehousing. Poor road conditions, inability to handle high traffic density and connectivity issues contribute to relatively high construction costs in the country's logistics sector. Despite this, third party logistics operators, e-commerce giants like Amazon and retail players such as Walmart and Flipkart continue to create demand for warehousing across the country.

Online retailers are now more aggressively looking to occupy warehouses in tier one and tier two cities and are collaborating with logistics service providers to try to minimise delivery costs, gain better coverage and speed up operations.


With the rise of e-commerce in Malaysia, companies are capitalising on this emerging trend, with particularly high interest in cold chain logistics and last mile delivery points. The majority of the population is concentrated along the coastline of the country, which keeps logistics costs low.

Furthermore, Malaysia’s strategic geographic location makes it an important transhipment hub, with Port Klang acting as a focal point for trade.

Vietnam and Indonesia

As rapidly developing nations, Vietnam and Indonesia have now reached an inflection point thanks to their GDP growth, young demographic and investment in new technologies. To keep pace with rising demand, the logistics markets in these countries is in a transitional stage, with facilities starting to modernise and digitise.

Vietnam in particular is growing as a manufacturing hub, which is further driving warehouse sector growth.


The Australia industrial and logistics sector has experienced strong growth over the past few years benefitting from the country’s strong underlying economic fundamentals, growing population and the rise in eCommerce.

Consumer demand for fast delivery is seeing centrally located sites with good transport access increasingly sought after.

For further information contact:

Venus Bhardwaj
e: [email protected]
t: +22 40719800

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