Warehouses nearly full as logistics firms expand

MANILA, Philippines — Nearly every warehouse in Metro Manila and Central Luzon was taken up in the first quarter as the logistics sector expands its operations to take advantage of the rising demand for fast moving consumer goods (FMCG).

JLL Philippines head of research and consulting Janlo de los Reyes said logistics occupied 91.1 percent of the 1.6-million square meters of storage space in the first quarter.

Close to 367,000 sqm will be also added to the warehouse stock in Central Luzon and Southern Tagalog, and 208,400 sqm of them are scheduled to be completed within the year.

In the first quarter, logistics registered an occupancy rate of 100 percent in Central Luzon, 98.4 percent in Metro Manila and 84.2 percent in Southern Tagalog. More than a fourth of the upcoming supply is now reserved for leasing, De los Reyes said.

Based on JLL data, FMCG accounted for roughly a third of the take-up, while third-party logistics made up 28.6 percent of the storage space. As physical stores remain shut due to operational restrictions, logistics firms benefit from the consumer shift to door-to-door shopping.

“In terms of segment, we do see an uptick with regard to the take-up of these different sectors – FMCG, as well as third-party logistics – in terms of the overall occupied stock of logistics within Metro Manila, CALABARZON, as well as in the Clark area,” De los Reyes told reporters.

Vacancies in retail spaces across Metro Manila widened to 6.6 percent in the first quarter, from 4.2 percent in the prior quarter, as brick-and-mortar shops gave up 22,600 sqm of leasing on business restrictions enforced by the government.

In the nation’s capital, Pasig City recorded the highest vacancy for retail at 36.6 percent, followed by Makati City’s 13.2 percent and Muntinlupa City’s 12.7 percent.

“There’s still a lot of store closures that are offsetting the store openings during the first quarter. That’s the reason why we are seeing an uptick still in terms of overall vacancy in the metro,” De los Reyes said.

“We haven’t seen any new completions since last year. The last supply that we saw was coming in the fourth quarter of 2019, and a lot of retail projects remain on hold given this pandemic.”

Available stock for retail firms steadied at 656,400 sqm in the first quarter. JLL expects this supply to stay the same as expansions were deferred until the end of this year.

In terms of pricing, the cost of renting in a Metro Manila mall dipped to P1,730 per sqm a month, as operators were left with no choice but to slash rates for tenants to stay.