In 2015, e-commerce drove a 51% increase in new logistics space in Asia.

According to a new report from CBRE Asia, the expansion of organized retail in emerging markets and the strong growth of e-commerce will continue to drive demand for modern warehousing and logistics space in most markets in the APAC region in 2015. Despite a boom in new supply, rental growth continues, but at a slower rate. promotions
CBRE Asia’s Darren Benson, Executive Director, Head of Industrial & Logistics Brokerage, said: “Logistics in APAC will remain a hot sector for investors in 2015, owing to strong long-term fundamentals, and will continue to attract capital, thanks to three key drivers: strong industrial production growth on the back of the US economic recovery, growing consumer markets, and the continued development of the e-commerce sector. These issues are intertwined since a strong manufacturing economy contributes to increasing incomes and rapidly expanding consumer markets. This story has already played out in China, and we expect it to play out in Southeast Asia and India as well.
However, there is still a scarcity of high-quality assets for sale, which makes it difficult for many investors to get started. The trend for e-commerce companies to create their own logistics networks, in particular, is prompting logistics developers to buy land and build logistics centers or participate in build-to-suit projects to meet this demand. The main opportunity for investors to join this sector this year will be to form strategic alliances with logistics developers.”
For 2015, the following are the main trends in the APAC industrial and logistics sector:
Stronger logistic rents, particularly in Hong Kong, Osaka, and Shanghai, as a result of increased demand. This will happen amid a boom in new logistics supply: CBRE Research expects 65.1 million sq. ft. of new logistics supply in 2015, which is 51% higher than the annual average between 2010 and 2014.
While rents will rise, speculative logistics space development in a few markets, particularly Tokyo, Seoul, and Singapore, will limit rental growth. We’re also seeing an increase in occupier sensitivity to rising rental costs in absolute terms, which will act as a brake on rental development.
Overall logistics rental growth in Asia Pacific is expected to be 2.9 percent in 2015, down from 7.1 percent in 2011. Due to strong demand from retailers, e-commerce firms, and third-party logistics firms, Hong Kong, Guangzhou, Shenzhen, Shanghai, and Osaka will lead rental growth.
In Asia Pacific, e-commerce is a significant and rapidly growing segment of consumption, with revenue from business-to-consumer e-commerce projected to double from US$525 million in 2014 to US$1.05 billion in 2017. As e-commerce firms and retailers concentrate on shortening delivery times, this increase in e-commerce revenue is having a disruptive impact on a range of markets, including China, Japan, and India, fueling the development of modern logistics facilities in Asia “ Occupiers are gradually shifting towards faster delivery times in APAC, necessitating the increased use of modern logistics facilities as a result of increasingly demanding customers. Given the rate of change, occupiers will find themselves competing for limited core logistics space as demand shifts to modern facilities. If market demand or manufacturing picks up faster than expected, major occupiers may be forced to lease decentralized logistics locations, potentially raising transportation costs. Occupants may have to decide on a long-term plan and carefully choose strategic locations. As the competition for modern logistics space heats up, built-to-suit options can help mitigate some operational risk “, said Jonathan Hsu, CBRE Asia Pacific’s Director of Research.