Philippine industrial property players remain bullish on expansion, with 84 percent planning to increase their footprint over the next three years despite economic uncertainty, rising construction costs, and high operating expenses.
The expansion appetite, while still strong, has eased from 93 percent in Colliers Philippines’ 2025 survey, suggesting companies are becoming more selective even as industrial property fundamentals improve.
Kevin Jara, director for industrial services at Colliers Philippines, said the firm’s Industrial Property Market Pulse H1 2026 found that 92 percent of respondents had a positive outlook for their businesses over the next 36 months.
Forty percent were “extremely positive” and 52 percent “somewhat positive,” while 8 percent were neutral. None reported a negative outlook.
The expansion plans come as warehouse vacancy across Central Luzon, Metro Manila, and Southern Luzon fell to 13.1 percent in the first half of 2026 from 16.8 percent a year earlier, indicating stronger absorption as traditional businesses and e-commerce firms took up new supply.
CALABARZON emerged as the top expansion destination, cited by 29 percent of respondents, followed by Central Luzon at 23 percent.
E-commerce remains an important demand driver, although its contribution could moderate. About 65 percent of respondents expect e-commerce-driven demand to slow somewhat.
Still, the sector faces a tougher cost environment. Political and economic uncertainty, construction costs, and high utility and operating expenses were identified as key constraints to expansion.
The combination of strong expansion intentions and falling vacancy points to sustained demand for industrial space. However, the decline in companies planning to expand suggests occupiers are becoming more disciplined about new commitments.
For developers and investors, this points to a market where demand remains intact but expansion is increasingly selective, with location, operating efficiency, and visibility on future demand likely to play a bigger role in investment decisions.
With industrial vacancy already tightening across major hubs, competition for strategically located and cost-efficient facilities could intensify as companies pursue growth while managing expenses.
