Demand continues to stabilize with positive net absorption growth

• The Northern Modern Ready-Built Warehouse market returned to stable performance in Q4 2025 following a period of slower growth in earlier quarters, particularly related to US reciprocal tariffs. Manufacturing activity continued to drive demand in this quarter, while increased consumer purchasing during the year-end period boosted warehouse demand from retailers, 3PLs and e-commerce.
• Q4 2025 delivered strong results with net absorption reaching approximately 125,000 sqm, surpassing the combined absorption of the first three quarters. This performance brought full-year 2025 net absorption to 236,000 sqm, marking a 13% increase y-o-y.

Supply grows substantially with high-quality developments

• The market experienced substantial expansion with 256,000 sqm of new leasable space, elevating total supply to over 2.04 million s.m.
• Q4 2025 featured several major project completions, including the BWID ESR Yen Phong expansion, Warehouse B2 at Horizon Park, and Sembcorp Logistics Park Dinh Vu.

Average rental rates show slight growth, primarily driven by favorable pricing from newly completed projects

• Q4 2025 average asking rents climbed to USD 4.9 per sqm per month, reflecting modest quarterly growth of 1.5% and annual appreciation of 6.6%.
• This rental increase stemmed primarily from pricing at newly delivered projects, as rents for existing properties maintained relative stability.

Outlook: Supply is projected to expand substantially in 2026. Demand is anticipated to maintain stable momentum

• The market is expected to continue rapid expansion in 2026 with 683,000 sqm of new spaces, primarily from projects by key developers such as Mapletree, SLP, and BWID.
• Demand is forecast to follow a stable trend with primary warehouse leasing momentum continuing from manufacturers and 3PLs, while leasing activity remains competitive due to ongoing market challenges amid growing supply.