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Warehouse demand in the Philippines jumped 80% in the first half of 2025, met by strong growth in supply for the period, according to the latest property market outlook by PRIME Philippines
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Demand surged to 691,900 square meters compared to the second half of 2024, powered by wholesale and retail, logistics, and manufacturing activity
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Warehousing stock nationwide expanded by approximately 1.5 million sqm, leading to a 3.7% growth in industrial warehouse supply compared to the second half of 2024
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Occupancy maintained an average 94% rate, with Cebu having the highest industrial occupancy rate of approximately 98%
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Warehouse lease rates have remained broadly stable, with most provinces posting an average rate of change of zero to 2% in recent quarters
Warehouse demand in the Philippines jumped 80% in the first half of 2025, met by strong growth in supply for the period, according to the latest property market outlook by PRIME Philippines.
Demand surged to 691,900 square meters (sqm) compared to the second half of 2024, powered by wholesale and retail, logistics, and manufacturing activity.
More than the volume, expansions from traditional industrial locations to other areas have been observed, PRIME Philippines assistant vice president for industrial markets Joy Rosario-Bautista said in a presentation during the real estate advisory firm’s recent mid-year property market outlook media event.
Aside from demand growth, Rosario-Bautista said there is notable increase in the average warehouse size requirement, especially from the retail, fast-moving consumer goods (FMCG), and logistics sectors, as the population grows.
She said this also shows a deeper trend of companies now consolidating their operations to meet faster, larger, and more complex consumer needs, especially for e-commerce fulfillment and regional distribution.
Bulacan emerged as a standout during the first half, with the retail sector accounting for almost 83% of local requirements, equivalent to 13% of total national demand, reflecting its long-standing position as a preferred location for Metro Manila–based retailers seeking to strengthen their supply chains. Its strategic connectivity to the capital continues to make it highly attractive for distribution-focused tenants, PRIME Philippines noted.
Cavite, meanwhile, has seen a notable shift in demand patterns. Manufacturing-related interest, which began tapering off in late 2024, has continued to soften as tenants favor Batangas for its larger land supply, lower costs, and proximity to major ports. In contrast, logistics demand in Cavite has remained stable, reinforcing its role as a last‑mile delivery hub and signaling its evolution from a balanced manufacturing–logistics base into a logistics‑anchored submarket.
On the other hand, Laguna has experienced a slowdown in new demand due to historically low vacancy rates, averaging below 4%, which have pushed some prospective tenants toward neighboring corridors such as Cavite and Batangas. Even so, its 97.77% occupancy rate, sustained by long‑term tenants with high renewal rates, underscores its enduring relevance as a manufacturing and logistics hub.
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PRIME Philippines said the surge in demand is reinforced by distinct seasonal patterns, with both wholesale and retail, and logistics requirements typically peaking in the first and last quarters of the year, albeit for different reasons.
For wholesale and retail firms, these periods align with long-term network expansion and supply chain strategies, often tied to annual or biannual business planning cycles, resulting in research done early or late in the year.
For third-party logistics (3PL) providers, the same quarters see heightened short-term leasing activity to manage inventory surges during major sales periods and holidays. At the same time, local tenant preferences are shifting toward consolidated, strategically located warehouses over dispersed networks, as companies work to streamline their supply chains and reduce transport inefficiencies.
These concurrent peaks create a cyclical rhythm in the warehousing market, leaving the second and third quarters relatively subdued. Across these cycles, demand remains anchored in three sectors–wholesale and retail; transportation and logistics; and manufacturing—fueled by e‑commerce growth, the expansion of 3PL networks, and steady requirements from export‑oriented electronics manufacturers.
Manufacturing added further depth to demand in the first half, with 81,000 square meters of requirements from computer, electronics, and optical product makers, particularly in green technology such as solar components, electric vehicle batteries, and energy systems.
PRIME Philippines said a sharp rise in green tech production in 2025 may signal the early stages of a broader tech manufacturing expansion, positioning the Philippines as an emerging hub for clean, export-oriented industrial activity in Southeast Asia.
Heightened US-China trade tensions, especially tariffs on Chinese-made microchips and semiconductors, have accelerated supply chain diversification, prompting global manufacturers to consider the Philippines under the China+1+1 strategy.
The growth of warehouse supply has responded swiftly to burgeoning demand, PRIME Philippines noted.
From the first half of 2025, warehousing stock nationwide expanded by approximately 1.5 million sqm, leading to a 3.7% growth in industrial warehouse supply compared to the second half of 2024.
As of the first half of 2025, 3.98 million sqm of land for upcoming warehouse construction has been recorded, with a substantial share concentrated in Tarlac through projects such as Tari Estates and New Clark Estates.
Towards the north, Pampanga also remains a key focus for developers, particularly in Mabalacat, Angeles, Porac, and San Fernando, owing to its established industrial parks and excellent connectivity via the North Luzon Expressway and MacArthur Highway. Pangasinan, while still without a notable pipeline beyond a few major projects, is increasingly viewed as the next northern industrial province after Pampanga and Bulacan.
In Bulacan, the pipeline is concentrated in Bocaue and Sta. Maria, locations that take advantage of proximity to Metro Manila while mitigating flooding risks present in other parts of the province.
In the south, Cavite’s development hotspots continue to be General Trias, Carmona, and Silang, where connectivity to various expressways sustains their industrial appeal despite congestion challenges.
Cebu is also contributing to the supply base, with developments such as DoubleDragon’s CentralHub adding to the country’s growing network of strategically located warehouses.
Rosario-Bautista said PRIME Philippines’ research team forecasts total warehouse supply in the country to hit 41.5 million sqm in 2028, with growth driven by strategic pipeline developments in Tarlac and North Luzon.
Even with supply increasing, occupancy maintained an average 94% rate.
Cebu had the highest industrial occupancy rate of approximately 98% in the first half of 2025. This performance is expected to continue, supported by the upcoming delivery of 50,000 sqm of warehouse stock by end‑2025, which should help absorb pent‑up demand driven by resilient logistics and e‑commerce activity.
Moving forward, a growing number of tenants and developers have been relocating or expanding toward Liloan and Consolacion, creating a new industrial hotspot to bypass congestion and warehouse saturation in central nodes like Mandaue.
In Luzon, Laguna maintained a solid 97.77% occupancy despite a recent dip in new leasing inquiries and developer interest, with stability underpinned by a base of long‑term tenants, high renewal activity, and swift re‑absorption of vacated spaces, often within weeks.
Pangasinan, which had a 91.6% occupancy, primarily benefits from its proximity to the expressways.
While internal demand remains limited, interest from FMCG companies has increased as they seek to extend their reach into northern provinces.
Despite these developments, warehouse lease rates have remained broadly stable, with most provinces posting an average rate of change of zero to 2% in recent quarters.
The main exceptions were Pampanga, where rates climbed 25% in the first quarter following the introduction of premium warehouses in San Fernando and Mexico, and Laguna, where select high‑spec facilities drove a 7.6% increase in the second quarter. Aside from the two, this modest pace of growth reflects the prevalence of long‑term lease structures and the natural lag between price adjustments and the pass‑through of inflationary costs.
Rosario-Bautista noted, however, the rise in demand for premium grade warehousing is affecting leasing rates. She noted more companies are looking for higher grade warehouses to allow them to be more efficient in their operations and be compliant with their sustainability efforts. – Roumina Pablo
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