Late in 2022, Knight-Frank, in its Asia-Pacific Outlook for 2023, said rent in logistics warehouses across Asia-Pacific is expected to moderate in 2023 as supply chains begin to normalise and demand remains tempered.
It said then that rental outlook in five (Beijing, Shanghai, Greater Kuala Lumpur, Manila and Jakarta) of the 17 cities it tracked would remain unchanged, while increased rental is expected in the other 12 cities: Auckland, Brisbane, Sydney, Melbourne, Hong Kong SAR, Bengaluru, Mumbai, Delhi NCR, Singapore, Taipei, Ho Chi Minh City and Bangkok.
Christine Li, head of research at Knight Frank Asia-Pacific, noted that the tapering of rental growth is a first time since the Covid-19 pandemic hit in 2020.
"Deteriorating sentiments resulted in negative rental growth registered for the first time since the pandemic. High interest rates and inflation are promoting companies to reassess or consolidate their inventory," Li said.
"On the upside, we still see strong demand for cold chain facilities, especially in APAC, as consumers continue to favour e-commerce grocery. Alongside the shortage of quality supply, logistics rents are still expected to grow in 2023, albeit tamed," she added.
Rent outlook in 13 cities expected to increase
Despite expectations of a tamed growth, Knight-Frank still saw the rental outlook in 14 (Beijing, Shanghai, Hong Kong, Taipei, Bengaluru, Mumbai, NCR, Singapore, Manila, Ho Chi Minh City, Brisbane, Melbourne, Sydney, and Aukland) of the 17 cities it tracked to increase in the next 12 months.
Meanwhile, the rental outlook in three cities that Knight-Frank monitors: Jakarta, Greater Kuala Lumpur, and Bangkok, would remain unchanged.
Earlier, Knight-Frank noted that as headwinds brew into 2023, market fundamentals will render a general balanced logistics market in Asia Pacific, with rental growth set to moderate compared to the past two years.