AVERAGE warehouse rental is expected to experience growth between 3% and 5% by the end of 2020, according to a Knight Frank Asia-Pacific Warehouse Review, tracking prime warehouse rents across 17 key cities.
Based on the study by the independent global property consultancy firm, market conditions 16 of the 17 cities tracked are expected to remain stable or even improve for the next 12 months.
The positive outlook for growth in the second half of 2020 is due to higher space appetite from e-commerce players and essential commodities.
Apart from that, Tokyo recorded the highest half-on-half rental growth at 4.2%, due to healthy take up rates and the lack of available prime assets within the city.
Additionally, the report showed that the Shanghai warehouse market recorded the healthiest rental growth compared to Beijing and Guangzhou, at 3% half-on-half, led in part by a pickup in storage demand from cold chain operators.
“The outlook for industrial markets remains resilient due to robust demand from the e-commerce and essential goods sectors, as well as additional requirements for inventory storage to mitigate supply chain disconnects,” Knight Frank (APAC) head of occupier services and commercial agency Tim Armstrong said.
Meanwhile, Knight Frank Malaysia executive director of capital markets Allan Sim noted that the Klang Valley remains attractive in terms of warehouse rental competitiveness.
“The various incentives under the RM35 bil short-term Economic Recovery Plan (PENJANA) will help encourage more foreign direct investments (FDI) flows,” he added. “With timely incentives like these, Malaysia will be positioned as one of the main beneficiaries amongst our ASEAN counterparts, in capturing the shoring of manufacturing and supply chain operations amidst the ongoing restructuring of global supply chains.” – Sept 26, 2020
