Prime logistics rents up 8.6% in H1 amidst weak manufacturing output

Leasing activity is also stable.

The leasing activity for prime logistics remains stable in the second quarter of 2023 is stable amidst expansions and new set-ups picking up, CBRE said.

"Expansionary activity was seen by 3PLs and wholesale trade in the logistics and warehouse segment. There were new set-ups by the biotechnology and semiconductor industries in new hi-tech spaces," read the study.

There are no new completions making occupancy close to full for the logistics market in Q2 2023.

Amongst all industrial segments, prime logistics posted the highest rental growth of 4.8% QoQ as 3PL companies continue to drive demand for ramp-up logistics assets.

Occupiers are also ramping up to renew leases with no supply expected in the second half of the year.

Meanwhile, average warehouse and factory rents grew by 2.7% and 1.7% QoQ, respectively.

CBRE said industrial land supply will fill up from 2026 onwards.

Against this backdrop, businesses are cautious about operational costs amidst growing inflation.