Warehousing across Asia-Pacific

Logistics across Asia-Pacific is a dynamic market, featuring both major global companies as well as strong local players. With parts of Asia-Pacific being some of the fastest-growing regions globally for e-commerce, the competition to maintain market share and expand to new markets is fierce.

Full-year new logistics supply for Asia-Pacific is expected to reach 167 million square feet in 2021, 58 percent higher than the previous three-year average. The logistics and warehousing sector is under-going significant changes with increased merger and acquisition activity.

Both innovation and sustainability are key themes for the sector, where shorter turnaround times and efficiency in operations are in demand. The Suez Canal blockage and new waves of COVID-19 infections have constrained manufacturing capacity in India, Thailand, Vietnam and Indonesia. Prolonged disruption is prompting companies to boost local inventory to enhance resilience, driving increased demand for local warehousing.

The requirement to be closer to dense urban hubs, to service key catchments in China, India and Australia is driving heightened costs for small, centrally located facilities. Limited land availability is fuelling the vertical development of multi-storey warehouses in Singapore, Hong Kong and Japan. Pharmaceuticals, food and beverages are driving growth in cold storage, while e-commerce and manufacturing are driving demand for ambient warehouses.

The region is home to lots of small/medium sized enterprises, many of which are going online to increase their business opportunities. In addition to local players in each country, prominent logistics companies in the APAC market include DHL, C.H. Robinson Worldwide Inc, DB Schenker, Ceva Logistics, Kuehne + Nagel, DSV, ESR, Alibaba and UPS.

These companies are all making tactical moves to consolidate their strengths, including IPO activity, captive-function carve outs, strategic investments and mergers and acquisitions. In an example of this, Kuehne + Nagel acquired Apex International for $1.5 billion in 2021 to strengthen its Asia air-freight-forwarding (AFF) network.


China continues to dominate the market as a key player in the logistics sector due to its global position as a manufacturing hub.

The central government has prioritised strengthening national logistics systems internally and improving regional trade externally. To meet this target, the central government is repositioning key logistics hubs across the country and extending investment and financial support to these locations.

In 2020, China added 22 new cities to the existing list of 23 logistics hubs announced in 2019. The National Development and Reform Commission (NDRC) reportedly plans to identify 150 logistics hubs in the next five years.

Hong Kong

Hong Kong is one of the most expensive places to build warehousing in our global index. Construction costs are costly in Hong Kong because commodity prices are very high and manufactured goods are imported.

Hong Kong’s cargo industries were hit hard by the pandemic leading to a decline in the exports and imports. The recovery in trade demand will likely be milder than that achieved from previous troughs. Weak local consumption demand is also set to persist until cross-border travel fully resumes. Warehouse demand from retailers was limited for the duration of H1 and H2 of 2021.


The overall outlook for Singapore’s manufacturing sector looks positive, with both the electronics and biomedical sectors poised to see sustained output growth.

Singapore has been a beneficiary of the manufacturing shift to Southeast Asia following the trade war as well as the “China plus One” strategy, however, uncertainties surrounding the regional supply chain remain as the pandemic continues to play out globally.


In recent years, India’s previously fragmented warehousing sector has modernised. In particular, there has been a rise in the level of domestic e-commerce driving logistics demand.

During 2021, India has seen a recovery in global and domestic demand for goods. This has caused prices of steel and cement to spike significantly. Labour costs have also increased during the pandemic. Warehousing remains a low margin business, meaning the sector has struggled to absorb these rises in construction costs.


Overall demand for warehouse space in Malaysia has been strong, driven by the growth in e-commerce and increased manufacturing activities.

In the short term, multi-storey industrial premises are a key focus of developers due to the scarcity of land in established and matured industrial localities with good accessibility and connectivity.

In the RM15 billion Malaysian Economic and Rakyat Protection Assistance Package (PERMAI), unveiled in January 2021, there is a RM300 million allocation for e-commerce campaigns. This is expected to spur further demand in the logistics and warehousing sector.


Vietnam is one of the fastest-growing e-commerce markets in Southeast Asia. However, COVID-19 continues to impact supply chains and operations in the manufacturing industry, leading to labour shortages, delays and price escalation. FMCG, e-commerce, pharmaceuticals and cold storage are all sectors with high demand for additional warehouse space near urban areas.


The freight and logistics sector is an important part of Japan’s economy. Tokyo, Nagoya and Osaka are the major logistics locations in this market.

Greater Tokyo is the main warehousing hub with more than 400 million sq. m. of space. It’s the most expensive market in our Index due to domestic supply/demand pressures, a limited contractor pool and labour shortages which have been exacerbated by the pandemic.

Australia and New Zealand

The Australian industrial and logistics market has continued its strong run from last year into 2021, with occupier demand reaching a new record high in the first quarter of the year. Industrial property is the best performing asset class overall in the region, surpassing the office sector. While the impacts of COVID-19 on commercial property are very evident, industrial assets have demonstrated resilience with continued demand from tenants.

Despite supply chain disruption and skilled labour shortages, industrial markets have remained strong over the last 12 months. Demand continues to be driven by the transport, postal warehousing and wholesale retail sectors, making industrial and logistics an attractive class for investors.

For further information contact:

Venus Bhardwaj
e: [email protected]