Logistics, industrial sector the ‘sunrise’ of real estate

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Property consultant Cushman & Wakefield said that the logistics and industrial sector is the ‘sunrise’ of the real estate market, driven by the continued increase in warehousing requirements from electronic commerce (e-commerce) players

“It hasn’t really gone down in terms of rents,” said Claro Cordero, Cushman & Wakefield head of research. 

“So you have a highly resilient demand, ever evolving and increasing demand, and you have players that are trying to catch up with the demand, which is why we consider logistics and industrial to be a sunrise industry,” he added.

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But Cordero said supply of industrial space is slow to grow as developers find it hard to look for sites in areas where infrastructure is present. 

“Developers and operators are looking at areas that have significant ease of access,” he said. 

Currently, Cushman & Wakefield said there is a total of 6,540 hectares of industrial estates in the country, 163 hectares of which were completed in 2024. 

Cushman & Wakefield said another 278 hectares are expected to be completed further this year. 

Cordero noted that rent escalation has been recorded at 4 percent per year. 

Cordero said there remains an unserved demand for warehouse space that makes use of automation. 

“Imagine you have a cold storage facility, but you’re still doing manual inventory, it’s not up to par,” he said. 

“We recently toured around areas such as Cebu, Cagayan de Oro and Davao where we looked at the existing inventory. We looked at the ability of these developments to tap on the digital and automation efforts, the developments are unable to do that,” he added. 

Cordero said there is a need for a “completely new set of warehouse facilities or redevelop existing warehouse facilities.”

Cordero said that as e-commerce continues to grow, so does the logistics space market. 

“You have platforms like Lazada that will require that. Lazada open(ed an industrial) space in Laguna, but (it is) looking at other areas. (It is) looking at micro markets to serve other areas,” he said.

Cordero said the growth of other urban areas outside Metro Manila also ensures the growth of the logistics sector, as demand for last mile delivery of goods increases.

“The demand for last- mile delivery and the ability of fast moving consumer goods to be right where next to the consumers (is) the main reason why we have that growth for logistics,” Cordero said.

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