Warehouse demand, tenant confidence drive industrial sector growth

The country's industrial property market continues to chart its growth trajectory, driven by the surge in warehouse demand coupled with tenant confidence, according to a local full-service commercial real estate consultancy.

- By CATHERINE TALAVERA

Data from Prime Philippines showed that the industrial sector recorded one of its strongest half-year performances to date as nationwide warehouse demand rose by 80 percent to 691,900 square meters in the first half of 2025 compared to the second half of the previous year.

"Warehouse demand rose significantly by 80 percent since the second half of 2024. But more importantly, we're not just seeing volume, we're also seeing expansion in coverage," Prime Philippines Assistant Vice President and Head of Industrial Markets Joy Rosario-Bautista said in a recent media briefing.

She noted that industrial locators are looking at areas further north, such as La Union, Bataan, Nueva Ecija, and Isabela.

"We also see opportunities in the South of Luzon, which is the Bicol area," Rosario-Bautista said, adding that they recently transacted a deal in Bicol for around 30,000 square meters, which would create jobs in the region.

"But it's not just the total demand that's growing. It is also notably the average size per requirement, especially from the retail FMCG and logistics sector, mainly because of our demographic profile, as well as our population. This increasing warehouse size per locator reflects a deeper trend. Companies are now consolidating operations to meet faster, larger, and more complex consumer needs, especially for e-commerce fulfillment and regional distribution," she added.

The Prime Philippines official emphasized that key provinces continue to maintain an average of 94 percent occupancy even with an additional eight percent growth in industrial supply in the first half.

"This reflects sustained tenant confidence, despite new inventory entering the new market," Rosario-Bautista said.