Mainland China’s demand for warehouses plunges as Singapore’s surges: Knight Frank
- The sluggish mainland China economy weighs on demand for logistics space in Shanghai and Beijing, while Singapore see 10.8 per cent growth
Rents for industrial spaces across much of Asia-Pacific continued on an upwards trajectory in the first half of 2024, but mainland China saw a sharp plunge as the sluggish economy weighed on demand, according to a report by Knight Frank.
Southeast Asia saw the biggest rent increases, with Singapore the best-performing city, the property consultancy said on Wednesday. Rents for logistics properties in the Lion City increased by 10.8 per cent year on year in the first half, riding on the back of strong factory activity.
Logistics rents held steady or increased in most of the 17 cities Knight Frank tracks, but slumped in mainland China as weak consumption and exports reduced demand for warehouses.
“While exports have been a positive spot for the Chinese mainland, they have to be considered against the macroeconomic backdrop,” said Christine Li, Knight Frank’s head of research for Asia-Pacific. “Consumption and investment have been weak, and the broad economic slowdown has weighed on the demand for logistics warehousing space in Shanghai and Beijing.”
Rents for logistics spaces plunged 15 per cent year on year in the first six months in Shanghai and 8.6 per cent in Beijing as tenants chose to surrender existing leases and downsize.
