-
Warehouse supply in the Philippines is seen to continue expanding by about 4% this year
-
Logistics, manufacturing, and wholesale and retail companies remain key drivers of demand
-
This year’s forecast is similar to the 4% growth seen in 2024 that brought total coverage to 37.6 million square meters
-
PRIME Philippines founder and chief executive officer Jet Yu said their clients and occupiers from the industrial sector are bullish in the next two to three years
-
For this year, warehouse supply is seen to be concentrated in Rizal, Cavite, Laguna, Pampanga, Cebu, and Davao
-
Cold storage supply grew by 12.9% year-on-year in 2024 and is expected to grow by 9% this year
Warehouse supply in the Philippines is seen to continue expanding by approximately 4% this year, with logistics, manufacturing, and wholesale and retail companies remaining key drivers of demand, according to the latest property market outlook by PRIME Philippines.
The forecast for this year is similar to the 4% growth seen in 2024 that brought total coverage to 37.6 million square meters (sqm).
Among the provinces, Batangas saw the highest year-on-year increase of 6.8% to 3.6 million sqm, followed by Cebu with 6.3% to 4.98 million sqm, and Laguna with 5.7% to 9.33 million sqm.
“Over the past four or five years, I’ve talked about the industrial sector as a sleeping giant of the Philippine economy. And finally, this 2025, we’re seeing that this giant is about to be awakened. We’re seeing that most of our clients, most of our occupiers from the industrial sector are bullish in the next two or three years,” PRIME Philippines founder and chief executive officer Jet Yu said in a speech during the real estate advisory firm’s recent annual property market outlook event.
Warehouse demand doubled from the first to the second half of 2024, reaching 1.37 million sqm driven by logistics, wholesale and retail, and manufacturing companies.
The overall provincial occupancy rate for warehouses remained above 97% last year, led by Cebu (97.7%), Laguna (97.5%), Davao (97.4%), Cavite (97.4%), and Bulacan (97%).
Notably, Grade C warehouses (built not intended for warehouse purposes and require significant renovation to meet modern storage needs) mostly account for vacancies.
Warehouse rental rates, meanwhile, rose by 6.19% year-on-year, attributed to the tightening supply of Grade A (built to suit modern supply chain) and Grade B (buildings that require minor modernization for efficient use) warehouses. Yu noted there has been an increasing demand for Grade A and B warehouses, especially with companies implementing efforts to achieve sustainability.
For this year, the warehouse supply is seen to be concentrated in Rizal, Cavite, Laguna, Pampanga, Cebu, and Davao.
Warehouse requirements from logistics, wholesale and retail, and manufacturing companies are expected to remain the key drivers of warehouse demand.
Warehouse projects in the pipeline for Luzon this year are expected to be dedicated to cities outside Metro Manila such as Taytay, Silang, Calamba, and Porac.
In Cebu, warehouses are seen to rise outside of Metro Cebu in areas such as Balamban with the expansion of West Cebu Industrial Estate as well as in Consolacion with Prilad Industrial Park.
For Davao, developments are seen to emerge in Davao City, particularly in Bunawan, to cater to demand from logistics hubs.
PRIME Philippines noted the Philippine Economic Zone Authority plans to proclaim 30 economic zones this year, concentrating on CALABARZON, Central Luzon, Cebu, and Mindanao.
In terms of volume space required, logistics requirements are still the most prevalent, with wholesale and retail, and manufacturing consistently following behind. Moreover, average size requirements overall have been noted to increase significantly this year as requirements from 1,000 to less than 5,000 sqm have become more common compared to those below 1,000 sqm.
Occupancy rates by province are also expected to remain healthy at 90% and above this year.
Cold storage supply
Cold storage supply, meanwhile, grew by 12.9% year-on-year in 2024 led by Batangas, Laguna, and Pampanga, with frozen meat remaining the primary occupant.
In terms of location, Luzon cold storage has 735,000 pallet positions, while there are 162,000 pallet positions in Metro Cebu, and 44,000 pallet positions in Metro Davao. In terms of occupancy rate, however, Luzon saw a 3.5% year-on-year increase while Metro Cebu and Metro Davao both posted a 2% decline in occupancy rate.
This year, cold storage supply is expected to grow by 9%. Prime Philippines noted that the need for cold chain solutions will be further exacerbated by the increase in foreign trade of meat and fish as the local economy battles the spread of livestock diseases and other natural calamities. Moreover, the country’s average annual population growth of 0.84% for the next few years and a young population also indicate a steady demand for food supply.
Still, PRIME Philippines said based on internal supply-demand analysis, the Philippines is still much behind benchmark developed countries in terms of cold storage per capita. According to the Department of Trade and Industry (DTI), the pallet requirement for additional supply per region is estimated at 320,000 for Luzon, 130,000 for Visayas, and 100,000 for Mindanao.
Last year, PRIME Philippines won the contract from DTI for the consultancy service for the project that entails the development of a warehouse study and the creation of the terms of reference for the establishment of an online warehouse registry.
READ: PRIME PH wins contract to develop national warehousing registry
The project aims to identify areas with supply gaps or surpluses, and inform strategic planning for e-commerce and food security. The project also aims to help lessen food spoilage in the supply chain.
Data on warehouses in the Philippines is fragmented and no single agency has data on all warehouses.
Yu earlier said the transparency that the project will provide will make the warehousing and industrial market more competitive “because the end users, the occupiers, the logistics players can now easily access” what warehouse spaces are available nationwide “with just a few clicks on their computers and mobile.”
In an interview with PortCalls at the sidelines of the event, Yu said the project is also “very timely” with the forecasted growth in the industrial warehousing sector.
Yu said they have already completed the first phase of the project, which is data gathering nationwide, and submitted the data to DTI in December last year. The second phase is the creation of a web-based registry. Asked if Prime Philippines will also undertake this, Yu said they will let DTI disclose the next phase of the project. – Roumina Pablo
