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The Philippine industrial warehousing sector remained resilient and active during the first quarter of the year despite global uncertainty and geopolitical tensions, with regional industrialization continuing to gain momentum
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Warehouse supply grew steadily in the first quarter of 2026 at around 1.8% annually, with growth no longer concentrated in Metro Manila, Bulacan, and Laguna
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Demand in the first quarter was driven mainly by demand from the transportation and storage sector at 45-48%, with more tenants now prefer a customized facility that is aligned with their operations
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Lease rates remained generally stable in the first quarter despite rising construction costs, fuel prices, and logistics overhead
The Philippine industrial warehousing sector remained resilient and active during the first quarter of the year despite global uncertainty and geopolitical tensions, with regional industrialization continuing to gain momentum, according to a report by PRIME Philippines.
“What we’re seeing today is not a slow down; it’s a broader shift of direction of the occupiers to position themselves on how they will expand, operate, and position strategically across the country,” PRIME Philippines assistant vice president for industrial markets Joy Rosario-Bautista said in a presentation during a recent media briefing.
Warehouse supply increased steadily in the first quarter of 2026 at around 1.8% annually, with growth no longer concentrated in Metro Manila, Bulacan, and Laguna.
“(T)hey are now growing, and actively adding supply across emerging hubs, such as Tarlac, Batangas, western Cebu, Bicol, and parts of Mindanao, as companies continue to decentralize operations and strengthen regional distribution networks,” Rosario-Bautista said.
She added that supply growth “remains healthy and disciplined,” which means the industrial market is expanding without entering oversupply territory.
Compared to neighors within the Association of Southeast Asian Nations, the Philippines “is still in a growth and expansion phase rather than a matured industrial cycle,” she pointed out.
Warehouse occupancy, on the other hand, slightly softened from last year’s peak of 98% to around 96.9% in the first quarter of 2026, due mainly to additional supply that was slowly being absorbed by tenants.
“When we looked deeper into the occupancy level per corridor, we can clearly see that the industrial story is not uniform…It actually depends on the infrastructure access,” Rosario-Bautista said, adding that tenants from the logistics sector still prefer areas that are infrastructure-ready in consideration of transportation costs. Tenants also tend to go for areas closer to their source of raw materials or where new supplies are entering.
PRIME Philippines monitored approximately 115,500 square meters (sqm) of industrial warehouse demand nationwide, driven mainly by demand from the transportation and storage sector at 45-48%, outpacing the demand from the wholesale and retail sector,which was the main driver last year.
Demand for manufacturing (18-20%) was maintained for the quarter, particularly with expansions from the green technology sector.
Higher grade warehouses
Another trend PRIME Philippines is seeing is the increase in demand for higher grade warehouses, particularly grade A or built-to-suit (BTS).
Rosario-Bautista said more tenants now prefer a customized facility that is aligned with their operations, while landlords are becoming more cautious with speculative development because of the rising construction and operational costs and are building when there are already signed-up tenants.
Lease rates, meanwhile, remained generally stable in the first quarter despite rising construction costs, fuel prices, and logistics overhead.
“Looking ahead, we remain cautiously optimistic about the Philippine industrial sector,” Rosario-Bautista said, adding that they expect continued industrial warehouse expansion supported by the transportation, logistics, and the manufacturing sectors.
PRIME Philippines also expects continuous demand for regional industrial warehousing and higher grade warehouses, especially BTS.
READ: PH warehouse supply projected to grow by up to 5% in next two years
PRIME Philippines highlighted four regions in the Visayas-Mindanao area where growth is happening.
Industrial warehouse supply in Cebu now exceeds 5 million sqm with a 97% occupancy rate as demand continues to be healthy, according to PRIME Philippines Property Advisory vice president Ruth Coyoca.
Cebu’s industrial sector has also been rapidly decentralizing with highly urbanized areas such as Cebu City, Mandaue, and Lapu-Lapu City already saturated.
Warehousing activity in Liloan and Consolacion has accelerated, with newer nodes in Balamban gaining traction. Danao and Naga City are also identified as future industrial growth zones, while San Fernando and Carcar City are gaining ground as strategic warehousing and distribution points.
Cold storage, meanwhile, is one of the tightest sectors in Cebu. Out of more than 105,000 pallet positions, only around 2,000 pallet positions were available in the first quarter of the year. This is underpinned by Cebu’s robust port activity and demand driven by expansion activities of established operators in the market alongside fresh interest from competitors with no current footprint in Cebu.
Bacolod, on the other hand, is emerging as a consumption and services-led growth market area, making it one of western Visayas’ most closely-watched emerging cities, Coyoca noted.
The province’s limited warehouse availability and noticeable quality gap in industrial facilities has kept lease rates on the lower end. Coyoca said average lease rates in Bacolod is still P120 per sqm, and there are modern warehouses that can be leased for just P80-P200 per sqm.
In Mindanao, Davao continues to post one of the tightest industrial markets nationwide, with occupancy rates across its primary industrial belt ranging between 90% and 95%, reflecting sustained demand amidst continuous expansion.
Davao, however, still has a lot of bodega style warehouses with a lot of older grade C and D facilities that continue to experience slower absorption due to outdated specifications and evolving occupier requirements.
“Basically what this tells us is demand remains strong but tenants today are getting significantly more quality conscious,” Coyoca noted.
With vacancy remaining tight comes the increase in the rental rate so warehouse rents continue to trend upward and they are now averaging around P255 per sqm for grade A and B warehouses. Traditional warehoseus in Davao would still range around P100 to P150 per sqm.
Misamis Oriental, meanwhile, continues to experience an increase in port activity, which supports the demand for logistics and temperature-controlled logistics in the area.
Misamis Oriental holds close to two million sqm of dry warehouse space, making it one of Mindanao’s significant industrial nodes. Cold storage emerged as the most visibly expansionary sub-sector, driven by agricultural throughput, domestic food service demand, and port-linked trade activity.
“What’s becoming clear across VisMin is that growth is happening but each market is evolving differently,” Coyoca noted.
READ: Logistics, cold storage bright spots in PH property market
“What we’re seeing today reinforces our long term belief…about the decentralization phenomenon across the country and the future of Philippine real estate growth will become increasingly decentralized. Many of the country’s next major opportunities may no longer be found only within metro Manila,” she added.— Roumina Pablo
