The supply of warehouses in Metro Manila is coming under increasing pressure as soaring land values drive the conversion of industrial properties into higher-yield residential and commercial developments, according to property consultancy Colliers.
Julius Guevara, senior director and head of Capital Markets and Investment Services at Colliers, said industrial facilities have gradually been pushed out of urban centers as landowners seek better returns from condominium projects, office towers, and mixed-use developments.
“Warehouses and manufacturing facilities have steadily moved out of city centers over the past decades because landowners can generate much higher returns from residential or commercial developments,” Guevara said.
The trend has left Metro Manila with the tightest warehouse market among key industrial hubs. Vacancy rates in the capital region stand at just 5.5 percent, compared with 11.4 percent in Southern Luzon and 23 percent in Central Luzon, indicating limited space for logistics operators and manufacturers seeking expansion.
Metro Manila also has the smallest industrial inventory at 139,701 square meters, far below Southern Luzon’s 930,223 square meters, and Central Luzon’s 205,658 square meters.
Guevara cited Chino Roces Avenue in Makati as a prime example of the transformation. Once lined with warehouses and factories that supported Manila’s industrial economy, the corridor has evolved into a dense cluster of residential towers and office developments as the city’s business district expanded.
The shrinking supply comes at a time when demand for warehousing continues to grow, fueled by e-commerce expansion, retail distribution requirements, and supply chain modernization efforts.
Developers, however, face increasing difficulty in securing large industrial sites within Metro Manila. As a result, many logistics firms and manufacturers are relocating to emerging industrial corridors in Cavite, Laguna, Bulacan, and Pampanga, where land remains more affordable and available.
The migration of industrial facilities beyond the capital reflects a broader shift in the property market. While it opens growth opportunities for regional hubs, it also underscores the need for stronger transport links and logistics infrastructure to keep goods moving efficiently across the country.
