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Colliers Radar | Capturing Warehousing Boom

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Developers pivot to seize lockdown economy and household spending-driven opportunities in logistics and warehousing

Colliers Philippines believes that the pandemic has caused a significant interruption to the long run growth of the Philippines’ consumer-driven economy.

In our view, the COVID-19-induced interruptions have altered the immediacy in which retailers must innovate to remain relevant. The continued growth of the e-commerce sector and emergence of a lockdown economy have only compelled mall operators and retailers to aggressively firm up partnerships with logistics firms and warehouse developers to reach last mile deliveries and capture opportunities in the middle of a pandemic.

The industrial and logistics segment remains a property sector of relative stability despite the pandemic-induced economic slowdown. In our view, developers should maximize opportunities by:

  • Modernizing warehouses
  • Building more cold storage facilities
  • Exploring co-working and flexible warehousing options
  • Converting vacant mall and office spaces into micro-warehouses and fulfillment centres in the city.

The increased demand for logistics will likely be for the long haul. Colliers believes that there will likely be a healthy demand for warehouses even after the pandemic wanes as this will likely be sustained by an economy that is primarily household spending-driven. In our opinion, this is likely to be complemented by a growing demand for online shopping and retailers and mall operators’ shift to e-commerce. With increasing competition in the retail landscape, mall operators need to differentiate and a partnership with providers of logistics and warehousing services plays a crucial role in keeping businesses afloat. We see developers tapping into the sector’s growth prospect as shown by rising storage investments across the country.

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Colliers Radar | Capturing Warehousing Boom

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Joey Bondoc

Associate Director

Research

Manila

Prior to joining Colliers in March 2016, Joey worked as a Research Manager for a research and consutancy firm where he handled business, political, and macroeconomic analysis. He took part in a number of consultancy projects with multilateral agencies and provided research support and policy recommendations to key government officials and top executives of MNCs in the Philippines.

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