The Asia-Pacific warehouse markets turned in a strong performance in H2 2020, fuelled again mainly by continued growth in e-commerce consumption and improving manufacturing sentiment as many economies across the region begin their road to recovery. As at the end of H2, the average PMIs across the region stood at 52.1, where above 50 signifies expansion, a marked improvement when compared to the average 47.2 PMI reading at the end of H1. Furthermore, China’s economy beat estimates with a 6.5% year-on-year growth in Q4 2020, bringing its full year growth to 2.3% year-on-year, making it the only economy globally to record positive GDP growth in 2020; note that this was mainly driven by domestic consumption and expectations on growth to accelerate further once exports start to ramp up.

In H2 2020, the rents for prime warehouses across Asia-Pacific on average rose 0.4% year-on-year, with 13 out of 17 the markets we tracked recording either stable or improved rents over the past half. Based on estimates, e-commerce retail sales grew 14% year-on-year in 2020 across most of the Asia-Pacific markets; expectations are for this momentum to continue building in 2021. As such, we are optimistic on the outlook for the region’s warehouse sector and project average rental growth to range between 3% to 5% by the end of 2021.