Although the pace of new supply growth slowed through Q1 2025 it still remains at a high level, exerting rental pressures on the overall premium logistics warehouse market. In areas with large volumes of new supply, landlords continued to adopt the strategy of trading leasing space volume for lower rentals in order to alleviate leasing pressure, resulting in modest rental level declines. Meanwhile, the substantial volume of new supply in the medium-to-long term poses continued downward pressure on future rent growth. Amid increasing market uncertainties, developers may opt to reduce new project entries or delay project commencements in order to mitigate leasing challenges.
Investors maintained a cautious attitude in the Q1 2025 period. The industrial/logistics sector accounted for 19% of total investment transaction volume in Q1 2025, dropping slightly from the 21% recorded in 2024. Looking ahead, the overall logistics market will require multi-industry integration and synergies, accelerated digital transformation, and green and low-carbon development, to jointly build a resilient supply chain system, thereby enhancing overall positivity in the investment market.
Chinese Mainland
- The total stock of premium logistics warehouse space on the Chinese mainland reached 127 million sq m in Q1 2025.
- Approximately 824,000 sq m of new supply entered the Chinese mainland logistics market in Q1.
- The overall vacancy rate dropped 0.5 percentage points q-o-q to record 17.3%.
- Overall average rents fell 1.4% q-o-q to RMB30.6 per sq m per month.
- Ahead, an additional 29.60 million sq m of new supply is scheduled for completion by the end of 2027.
Hong Kong China
- Hong Kong’s total stock of premium logistics space remained at 35.3 million sq ft (3.27 million sq m) in Q1 2025.
- The Hong Kong overall prime warehouse vacancy rate rose to 8.2%, up 0.6 percentage points q-o-q. The overall prime warehouse rental level fell by 5.2% q-o-q in Q1, to HK$14.2 per sf per month, marking the largest quarterly correction since Q2 2020.
- Looking ahead, although there will be no new supply in 2025–2026, three new projects are expected to be completed in 2027–2028.
Taiwan China
- Total premium logistics stock increased to approximately 1.10 million pings (3.64 million sq m).
- Incoming supply is expected to add 246,135 pings (813,670 sq m) of new stock by the close of 2026, an expansion of approximately 22.4%. Around 83% of stock is concentrated in Taoyuan City, close to Taoyuan International Airport.
- The average monthly rental level increased to approximately NT$700–850 per ping
Outlook
The logistics industry is transitioning from a cost-driven model to a value-driven model, requiring data-driven precision operations to achieve differentiated competitiveness. Digital transformation is not merely a technological upgrade but a reconfiguration of the business model. The integration of digitalization with green and intelligent development will become a key focus for logistics operators.
