19 January 2015

Colliers International anticipates that volume shipped by the logistics industry in Asia will rise in 2015, underpinning demand for industrial and warehouse space, according to Colliers International’s 2015 Property Outlook. Private consumption continues to grow, as does the emerging middle class of many Asian nations.

The increased spending power of young people and rapid urbanisation are also positive trends that lead to a greater need for warehouses in particular.

“Chinese shoppers are increasingly choosing to buy online not just because of convenience in accessing goods and services but also because a large segment of the younger population considers it a trendy style of living,” Simon Lo, Executive Director of Research and Advisory Services, Asia, said.

The Chinese government is actively encouraging the development of the e-commerce industry, improving Internet access and infrastructure, enabling more-reliable delivery of online purchases to China’s huge population, including people living in rural areas. Chinese Premier Li Keqiang has stated that the e-commerce sector is likely to follow real estate as the next driving force in economic growth.

The sustained recovery in the U.S. economy should lead to an increase in exports from Asia. The range of real-estate opportunities Asia-wide will broaden in 2015, as economic changes in Southeast Asian nations such as Malaysia, Indonesia and Vietnam foster demand for warehouse and industrial space. The increase in supply should present opportunities for occupiers to relocate and consolidate their facilities, to enhance operating efficiency.

Industrial land for manufacturing has returned as a focus in China. A regulatory change adjusting the length of land-use rights from 50 years to 20 years should encourage more end-users to acquire land for genuine manufacturing purposes in 2015, as speculators beat a gradual retreat.

In terms of capital-markets activity, Colliers predicts that the volume of deals will rise in 2015. Investors will have a wider range of markets to scour for acquisitions given the economic improvements in Southeast Asia. There will also be more opportunity in China in particular, as the number of new logistics facilities in second- and third-tier cities rises.

“To put it simply, the volume of deals in the logistics sector should boom in 2015, with a diverse range of activity including the sale of individual properties, equity investments and joint ventures,” Tammy Tang, Executive Director of Industrial Services of Colliers Shanghai, said.

For more results from Colliers International’s Asia Property Outlook 2015 report, please visit www.colliers.com/en-gb/asia/realestate2015.