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Warehouse supply in the Philippines continued its steady growth to 42 million square meters in 2025, according to the latest property market outlook report by PRIME Philippines
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Warehouse space is projected to grow by 4% to 5% annually in 2026 to 2027
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Occupancy rate was at 97.1% in 2025, with most key regions recording more than 90% levels
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Lease rates increased by up to 30% in 2025 compared to pre-pandemic levels, driven primarily by the market’s shift toward higher spec requirements
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Wholesale and retail trade, transportation and storage, and manufacturing remain the top three warehouse demand drivers
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The cold storage sector marked its strongest year of realized supply growth in at least the past decade, with total capacity reaching around 1.2 million pallet positions
Warehouse supply in the Philippines continued its steady expansion in 2025 and is projected to grow by 4% to 5% annually in 2026 to 2027, according to the latest property market outlook report by PRIME Philippines.
Total supply was around 42 million square meters (sqm) last year, 5% higher than the almost 40 million sqm supply in 2024.
PRIME Philippines founder and chief executive officer Jet Yu said the industrial property sector continues to attract capital, with lease rates climbing at modest levels, occupancy remains extremely tight, and grade A warehouse developments particularly in key growth corridors are absorbing demand consistently.
Warehouse supply has grown steadily over the years, with a much faster acceleration from 2020 to 2025 compared to pre-pandemic period, “reflecting long-term confidence in industrial demand,” PRIME Philippines Property Advisory vice president Ruth Coyoca said in a presentation during the real estate advisory firm’s recent 2026 property market outlook event.
READ: Warehouse supply seen to expand 4% in 2025
Beyond traditional hubs, Coyoca said growth is expanding in emerging corridors as developers and occupiers factor in flood risks, congestion, and operating resilience, favoring nearby lower risk locations rather than moving far from established markets.
Laguna remains the country’s primary industrial park hub anchored by mature Philippine Economic Zone Authority (PEZA) estates and easy connectivity to Metro Manila.
Cavite, on the other hand, has emerged as the key expansion market accounting for around 60% of newly accredited PEZA developments in 2024 to 2025, driven by spillover demand from Laguna and Batangas and proximity-driven site selection.
Build-to-suit developments in emerging markets is seen to continue in the next few years, thereby increasing land values in those priority areas.
Wholesale and retail trade, transportation and storage, and manufacturing remain the top three warehouse demand drivers in 2025, with requirements generally growing larger as distribution and production networks expanded.
Coyoca said more importantly, demand for high specification warehousing became the norm, including higher ceiling heights, stronger floor loading, and presence of loading bays, among others.
She noted that previously, PRIME’s clients’ requirements for floor load would range from 2,000 to 3,000 pounds per square inch (PSI), but has now increased to 4,000 to 5,000 PSI.
“These occupiers are future-proofing their operations,” Coyoca said.
PRIME assistant vice president for industrial markets Joy Rosario-Bautista said aside from technical specifications and location, tenants are also now factoring risk considerations such as whether the area is not calamity or flood prone as they now plan for longer terms.
Even with higher supply, occupancy rate was at 97.1% in 2025, with most key regions recording occupancy rates of more than 90%.
PRIME forecasts occupancy rate to further increase to 97.6% in 2026 and slightly drop to 97% in 2027.
Across key industrial provinces, warehouse lease rates have appreciated by up to 30% in 2025 compared to pre-pandemic levels, driven primarily by the market’s shift toward higher spec requirements.
Provincial lease rates continue to appreciate significantly, supported by the completion of Grade A warehousing both within and outside PEZA-accredited industrial parks.
Coyoca said moving forward, lease rate growth is expected to stabilize at around 2% per year supported by higher spec benchmarking and a more disciplined leasing environment.
COLD STORAGE
The cold storage sector, meanwhile, marked its strongest year of realized supply growth in at least the past decade in 2025 with total capacity reaching around 1.2 million pallet positions.
The growth in supply is backed by completed developments and not speculative pipeline assumptions, with expansion occurring across Luzon and key Visayas and Mindanao markets, Coyoca noted.
READ: Logistics, cold storage bright spots in PH property market
Cold storage supply has expanded by over 35% since pre-pandemic levels, driven not by short-term cycles but by long-term demand from food security, pharmaceuticals, export-oriented logistics, and temperature sensitive distributions.
Despite rapid expansion, the market remains below saturation, indicating that recent growth reflects cold chain catch-up and network build-out rather than oversupply.
For 2026, PRIME forecasts cold storage supply to continue growing to 1.3 million pallet positions.—Roumina Pablo
