Which APAC cities face tightening vacancy and lower flexibility?

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Supply Constraints Drive Increasing Competition in Select APAC Markets

Supply-constrained logistics markets in Australia, Japan, and Singapore are experiencing heightened competition for space, leading to anticipated declines in vacancy rates due to limited development pipelines. This trend aligns with broader regional dynamics, where 43% of Asia Pacific markets are projected to see reduced vacancy over the next three years, indicating a gradual tightening of market conditions. Conversely, markets such as India and mainland China continue to offer more tenant-favorable conditions, largely due to substantial new supply that provides occupiers with greater flexibility.
Declining Vacancy in Supply-Constrained Markets

Markets including Australia, Japan, and Singapore are specifically identified as experiencing increasing competition for logistics space. This competition is a direct consequence of limited new development, which is expected to drive down vacancy rates in these areas. This dynamic contributes to a wider regional trend where a significant portion of Asia Pacific markets are anticipated to experience a tightening of conditions.
Regional Tightening of Market Conditions

Across the Asia Pacific region, 43% of markets are forecast to see a decline in vacancy rates within the next three years. This indicates a general shift towards tighter market conditions, where demand is increasingly outpacing available supply. Such a scenario typically leads to reduced negotiating power for tenants and increased leverage for landlords.
Tenant-Friendly Conditions Persist Elsewhere

In contrast to the tightening markets, parts of India and mainland China are maintaining more tenant-friendly conditions. This is primarily attributed to higher levels of new supply entering these markets, which continues to offer occupiers greater flexibility in their real estate decisions. These markets are characterized by an abundance of vacant stock that reduces landlord pricing power.
Divergence Shapes Regional Strategies

The divergence in market conditions across Asia Pacific is significantly influencing both occupier strategies and investor positioning. While some markets face increasing competition and tightening vacancy, others offer sustained flexibility due to ongoing development activity. This necessitates a market-by-market approach for businesses and investors operating within the region.

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Which APAC cities face tightening vacancy and lower flexibility?

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