Navigating the future of industrial demand in Asia-Pacific

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Navigating the future of industrial demand in Asia-Pacific

October 13, 2026 / By Elizabeth Low

JLL’s inaugural Asia-Pacific Industrial Tenant Demand Study provides a comprehensive view of the industrial real estate landscape across 13 key markets in the region. Drawing on deep local market expertise and tenant behaviour data, the study examines how location priorities, industry-specific drivers and broader economic forces shape occupier requirements. While reflecting a specific point in time, this analysis reveals emerging industrial tenancy patterns and signals where market momentum is headed.

Key takeaways

Despite persistent macroeconomic headwinds, including geopolitical tensions and tariff uncertainty, expansion requirements remain strong, accounting for over half of total demand across the region. The 3PL, Logistics and Distribution sector continues to lead, representing more than 30% of active tenant requirements, with e-commerce following at approximately 11% of total demand.

Figure 1: Warehouse/Distribution vs. Manufacturing requirements (as a percentage of total requirements)
(In million sqm and as a percentage of total requirements)

Source: JLL Research, October 2026
Note: Warehouse/Distribution includes flex/R&D/lab, land and special purpose

Warehousing requirements dominate market activity, comprising around 80% of total demand. However, manufacturing demand is set for significant growth, particularly in India and Southeast Asia, fuelled by supply chain regionalisation strategies and the expansion of advanced manufacturing industries.

Build-to-suit and purchase requirements are heavily concentrated in emerging markets. India and Southeast Asia collectively account for approximately three-quarters of such demand, reflecting greater land availability, lower pricing and more flexible regulatory frameworks for greenfield developments.

Regional occupier trends

A notable gap persists between active tenant requirements and realised absorption, reflecting the cautious ‘wait-and-see’ approach many occupiers are adopting amid economic uncertainty. Decision-making timelines have extended, and lease conversion rates have moderated. However, underlying fundamentals remain supportive, with conversion rates expected to improve once macroeconomic clarity returns.

Figure 2: Demand by size (as a share of total deal count)

Source: JLL Research, October 2026
Note: Includes warehouse and manufacturing requirements across leasing, BTS, and purchase

Mature markets, including Australia and New Zealand, Greater China and Japan, showcase a clear preference for larger facilities. Over half of all requirements exceed 10,000 square metres. This trend reflects the presence of established occupiers with greater appetite for scale and modern logistics infrastructure. Meanwhile, emerging markets in India and Southeast Asia are seeing strong expansion-led demand as occupiers capitalise on supply chain regionalisation opportunities.

Industry highlights

Figure 3: Demand by industry (in million sqm)

Source: JLL Research, October 2026
Note: Chart includes top five industries for warehouse and manufacturing requirements across leasing, BTS, and purchase

The 3PL, Logistics and Distribution sector remains the primary engine of industrial demand across APAC, outpacing other industries. Steady leasing demand from 3PLs continues across key markets including Tokyo, Seoul, Sydney and Melbourne.

E-commerce continues to drive warehousing requirements, supported by APAC’s position as the world’s largest e-commerce market, accounting for approximately 40% of global e-commerce volume.¹ The emphasis on online retailing is driving demand for fulfilment operations, distribution hubs and returns processing facilities.

The automotive segment represents another key demand driver, concentrated in India, China and Thailand. India’s automotive sector, bolstered by government initiatives and growing domestic consumption, has emerged as a significant contributor. Meanwhile, China’s electric vehicle market expansion has generated substantial demand from the EV value chain, including battery manufacturing and component assembly facilities.

To find out more about the 2026-2027 Asia-Pacific Industrial Tenant Demand Study and gain deeper insights into your market, please contact the author.