Total demand reached 691,900 m2, compared to the second half of 2024, driven by the wholesale, retail, logistics, and manufacturing sectors.

According to Joy Rosario-Bautista, associate director of industrial markets at Prime Philippines, a leading commercial real estate consultancy in the Philippines, not only has the volume increased, but there's also a trend of expansion from traditional industrial zones to new areas. The average warehouse size has also grown, especially among retailers, fast-moving consumer goods (FMCG) companies, and logistics providers, as the population grows and consumer demand becomes faster and more diverse.

This reflects the trend of companies consolidating operations to meet the needs of fast, high-volume, and complex deliveries, particularly in e-commerce and regional distribution.

Prime Philippines leaders at a press conference on real estate market outlook on 7/8. Photo: Prime Philippines.

Prime Philippines leaders at a press conference on real estate market outlook on 7/8. Photo: Prime Philippines.

Bulacan leads in demand

In the first half of the year, Bulacan province stood out, with demand from the retail sector accounting for nearly 83% of local requests, equivalent to 13% of total national demand. Its strategic location near the capital makes it a top choice for retailers in Metro Manila to strengthen their supply chains.

In contrast, Cavite province saw a shift: manufacturing demand decreased as businesses opted for Batangas province due to larger land availability, lower costs, and proximity to seaports. Logistics demand in Cavite remained stable, confirming its role as a last-mile delivery hub.

Laguna province stagnated due to low vacancy rates (below 4%), causing some tenants to move to Cavite and Batangas. However, the occupancy rate reached 97.77% thanks to long-term tenants and high renewal rates.

Seasonal trends and three main sectors

Prime Philippines noted that warehouse demand usually peaks in the first and fourth quarters of each year:

Three sectors play a key role: wholesale and retail, transport and logistics, and manufacturing, driven by e-commerce, 3PL network expansion, and steady demand from electronics exporters.

Manufacturing alone contributed 81,000 m2 of demand from manufacturers of computers, electronic components, optics, and especially green technologies like solar components, electric vehicle batteries, and energy systems.

US-China trade tensions, especially tariffs on Chinese microchips and semiconductors, are driving supply chain diversification, making the Philippines prominent in the "China+1+1" strategy of global manufacturers.

Supply increases with demand

In the first half of 2025, the total industrial warehouse space in the Philippines increased by about 1.5 million m2, a 3.7% increase compared to the second half of 2024. The total land area for new warehouse projects reached 3.98 million m2, concentrated in Tarlac (Tari Estates, New Clark Estates).

Pampanga continues to attract investment thanks to existing industrial zones and good connectivity via the NLEX highway and MacArthur highway. Pangasinan is considered the next potential industrial province in the north.

Bulacan focuses on projects in Bocaue and Sta. Maria, both close to Metro Manila and away from flood risks. In the south, Cavite has hotspots such as General Trias, Carmona, and Silang. Cebu also added supply with projects such as DoubleDragon's CentralHub.

Prime Philippines forecasts that the total warehouse supply will reach 41.5 million m2 by 2028, driven mainly by strategic projects in Tarlac and North Luzon.

High occupancy rates, stable rents

Despite the increase in supply, the average occupancy rate remained at 94%. Cebu leads with about 98%, expected to be maintained with an additional 50,000 m2 of new warehouses by the end of 2025. Laguna maintains 97.77% thanks to long-term tenants and rapid refill rates. Pangasinan reached 91.6%, benefiting from its location near the highway.

Rents remained mostly stable, fluctuating between 0% and 2% in most provinces. The exceptions were Pampanga, which saw a 25% increase in the first quarter with the emergence of new high-end warehouses, and Laguna, which saw a 7.6% increase in the second quarter due to several high-standard facilities. Demand for Class A warehouses is increasing as businesses prioritize operational efficiency and meeting sustainability standards.

The Dan (according to PortCalls Asia)