The overall premium logistics warehouse market maintained a stable trajectory in Q1 2026. On the supply-demand side, landlords prioritized renewal quality and long-term asset value, favoring stable tenants such as manufacturers, while remaining cautious toward long-term leases at low rates. Tenants, in contrast, remained highly price-sensitive and valued expansion flexibility. Despite certain divergences in leasing strategies, both sides are negotiating based on an optimistic outlook for the market, reflecting a gradual recovery of confidence in the premium logistics warehouse sector.
Chinese Mainland
- The total stock of premium logistics warehouse space on the Chinese mainland reached 139 million sq m in Q1 2026.
- Approximately 2.39 million sq m of new supply entered the Chinese mainland logistics market in Q1.
- The overall vacancy rate dropped 0.2 percentage points q-o-q to record 18.1%.
- The overall average rental level fell 0.8% q-o-q to RMB28.9 per sq m per month.
- Ahead, an additional 13.86 million sq m of new supply is scheduled for completion by the end of 2028.
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 2026.
- The Hong Kong overall prime warehouse vacancy rate jumped to 11.8% in Q1 2026 from 11.2% in Q4 2025. The overall prime warehouse rental level further retreated by 1.6% q-o-q in Q1, to HK$12.9 per sq ft per month, marking the lowest level since Q1 2021.
- In the near term, no new supply is expected in 2026, but cautious leasing strategies among occupiers, especially 3PL operators, are likely to continue weighing on the leasing market. Cushman & Wakefield therefore projects prime warehouse rents to decline by 7% y-o-y in 2026.
Taiwan China
- Total premium logistics stock increased to approximately 1.34 million pings (4.44 million sq m).
- Incoming supply is expected to add 278,285 pings (919,951 sq m) of stock by the close of 2027, an increase of approximately 20.7%.
- Around 67% of stock is concentrated in Taoyuan City, close to Taoyuan International Airport. The average monthly rental level increased to approximately NT$750–850 per ping.
Outlook
The Chinese mainland’s premium warehouse market is emerging from a period of strategic positioning and bottoming out, entering a new phase driven by long-term value. The core shift in the market is a change in investment logic — from chasing short-term transaction spreads to prioritizing stable long-term returns. This is compelling both landlords and tenants to seek a new equilibrium amid the ongoing supply-demand dynamic.
Meanwhile, driven by the public REIT market, investors are no longer solely pursuing asset trading spreads but shifting toward long-term holdings. They place greater emphasis on the stability of rental income and lease quality, rather than focusing exclusively on asset appreciation potential. At the same time, public REITs' requirements on asset scale, yield rates, and self-held ratios are pushing underlying assets to demonstrate strong operational income operational capabilities.
