The premium logistics warehouse market remained in an adjustment phase in Q2 2026. New supply continued to enter the market, amid a moderate recovery in leasing demand. Rental and vacancy performance diverged across regions, with markets facing greater supply pressure continuing to rely on rental incentives and flexible leasing strategies to support absorption.
Chinese Mainland
- The total stock of premium logistics warehouse space on the Chinese mainland reached 141 million sq m in Q2 2026.
- Approximately 0.77 million sq m of new supply entered the Chinese mainland logistics market in Q2.
- The overall vacancy rate dropped 0.55 percentage points q-o-q to record 17.5%.
- The overall average rental level fell 1.6% q-o-q to RMB28.4 per sq m per month.
- Ahead, an additional 11.46 million sq m of new supply is scheduled for completion by the end of 2028.
Hong Kong China
- Hong Kong's total stock of premium logistics space remained at 35.25 million sq ft (3.27 million sq m) in Q2 2026.
- Citywide prime warehouse rents declined further by 3.5% q-o-q in Q2, to HK$12.4 psf per month, the lowest level since Q1 2014. The continued rental adjustment has meant greater affordability and has helped stimulate leasing momentum. As a result, the overall vacancy rate fell to 11.2% in Q2 from 11.8% in Q1.
- Vacancy will likely remain high and continue to weigh on the leasing market in the mid- to near-term. As such, we expect the leasing market to remain tenant-favorable in H2 2026, with prime warehouse rents forecast to decline by 7% over the full year of 2026.
Taiwan China
- Total premium logistics stock increased to approximately 140 million pings (4.63 million sq m).
- Incoming supply is expected to add 262,637 pings (868,223 sq m) of stock by the close of 2027, an increase of approximately 18.7%.
- Around 68% of stock is concentrated in Taoyuan City, close to Taoyuan International Airport. The average monthly rental level is approximately NT$750-NT$850 per ping.
Outlook
As new supply gradually recedes in certain regions, the overall premium logistics warehouse market is expected to shift further towards absorbing existing space and optimizing its structure. The recovery of leasing demand will continue to depend on the macro economy, corporate cost controls, and warehouse network adjustments, and the pace of recovery may vary across regions. Projects in core locations with a solid industrial base and stronger operating capabilities are expected to perform relatively steadily.
On the investment side, the industry’s focus on logistics real estate is gradually shifting from scale and capital appreciation towards cash flow stability and sustained operating capability. As long-term capital tools such as public REITs continue to develop, lease quality, tenant mix and income performance are becoming increasingly important. Landlords may place greater emphasis on operating existing assets, optimizing their customer portfolio and building service capabilities, while the long-term value of logistics real estate will continue to rest on stable occupancy performance and sustainable operating income.
