The country’s industrial property market continues to chart its growth trajectory, driven by the surge in warehouse demand coupled with tenant confidence, according to a local full-service commercial real estate consultancy.
Data from Prime Philippines showed that the industrial sector recorded one of its strongest half-year performances to date as nationwide warehouse demand rose by 80 percent to 691,900 square meters in the first half of 2025 compared to the second half of the previous year.
“Warehouse demand rose significantly by 80 percent since the second half of 2024. But more importantly, we’re not just seeing volume, we’re also seeing expansion in coverage,” Prime Philippines Assistant Vice President and Head of Industrial Markets Joy Rosario-Bautista said in a recent media briefing.
She noted that industrial locators are looking at areas further north, such as La Union, Bataan, Nueva Ecija, and Isabela.
“We also see opportunities in the South of Luzon, which is the Bicol area,” Rosario-Bautista said, adding that they recently transacted a deal in Bicol for around 30,000 square meters, which would create jobs in the region.
“But it’s not just the total demand that’s growing. It is also notably the average size per requirement, especially from the retail FMCG and logistics sector, mainly because of our demographic profile, as well as our population. This increasing warehouse size per locator reflects a deeper trend. Companies are now consolidating operations to meet faster, larger, and more complex consumer needs, especially for e-commerce fulfillment and regional distribution,” she added.
The Prime Philippines official emphasized that key provinces continue to maintain an average of 94 percent occupancy even with an additional eight percent growth in industrial supply in the first half.
“This reflects sustained tenant confidence, despite new inventory entering the new market,” Rosario-Bautista said.
Cebu led the country with an industrial occupancy rate of approximately 98 percent in the first half of 2025. This was followed by Laguna with a solid 97.77 percent occupancy despite a recent dip in new leasing inquiries and developer interest, with stability underpinned by a base of long‑term tenants, high renewal activity, and swift reabsorption of vacated spaces, often within weeks.
Pangasinan is another very promising province as it posted a 91.6 percent occupancy, primarily benefiting from its proximity to the Tarlac‑Pangasinan‑La Union Expressway (TPLEX) and Central Luzon Link Expressway (CLEX).
While internal demand remains limited, interest from Fast Moving Consumer Goods (FMCG) companies has increased as they seek to extend their reach into northern provinces,” Prime Philippines said.
Bulacan leads warehouse demand
Prime Philippines said that Bulacan emerged as a standout in the first half of the year in terms of warehouse demand, adding that nearly 83 percent of the demand was fueled by the retail sector. The consultancy stressed that this is equivalent to 13 percent of total national demand, reflecting its long-standing position as a preferred location for Metro Manila–based retailers seeking to strengthen their supply chains.
“Its strategic connectivity to the capital continues to make it highly attractive for distribution-focused tenants,” Prime Philippines said.
Meanwhile, Cavite has seen a notable shift in demand patterns as manufacturing-related interest continued to soften as tenants favor Batangas for its larger land supply, lower costs, and proximity to major ports.
In contrast, logistics demand in Cavite has remained stable, reinforcing its role as a last‑mile delivery hub and signaling its evolution from a balanced manufacturing–logistics base into a logistics‑anchored submarket.
Prime Philippines noted that Laguna has experienced a slowdown in new demand due to historically low vacancy rates, averaging below four percent, which have pushed some prospective tenants toward neighboring corridors such as Cavite and Batangas.
“Even so, its 97.77 percent occupancy rate, sustained by long‑term tenants with high renewal rates, underscores its enduring relevance as a manufacturing and logistics hub,” the consultancy said.
Luzon sees surge in manufacturing demand
Rosario-Bautista emphasized that Luzon has recorded a sharp increase in technology manufacturing demand in the first half of the year, with a total of 81,000 square meters of requirements from computer, electronics, and optical product makers, particularly in green technology such as solar components, EV batteries, and energy systems.
She added that points of interest for tech manufacturers include Batangas, Pampanga, and, most notably, Tarlac.
“A sharp rise in green tech production in 2025 may signal the early stages of a broader tech manufacturing expansion, positioning the Philippines as an emerging hub for clean, export-oriented industrial activity in Southeast Asia. Heightened US-China trade tensions, especially tariffs on Chinese-made microchips and semiconductors, have accelerated supply chain diversification, prompting global manufacturers to consider the Philippines under the China+1+1 strategy,” Prime Philippines said.
It added that the country’s competitiveness in attracting high-value manufacturing is being strengthened by the CREATE Law, Green Lane Services, and PEZA’s proactive facilitation of ecozone registrations.
“Strategic locations such as Clark, Subic, and Batangas, with their logistical connectivity, utilities readiness, and skilled labor pools, are expected to see heightened interest in build-to-suit manufacturing facilities and specialized warehouse clusters,” Prime Philippines said.
Industrial supply continues to expand
Prime Philippines noted that the country’s industrial supply is seen to match accelerating market needs as it continues to expand. As of the first half of 2025, 3.98 million square meters of land for upcoming warehouse construction have been recorded, with a substantial share concentrated in Tarlac through projects such as Tari Estates and New Clark Estates.
Additionally, Pampanga remains a key focus for developers, particularly in Mabalacat, Angeles, Porac, and San Fernando, owing to its established industrial parks and excellent connectivity via NLEX and MacArthur Highway. In Bulacan, the pipeline is concentrated in Bocaue and Sta. Maria, locations that take advantage of proximity to Metro Manila while mitigating flooding risks present in other parts of the province.
While still without a notable pipeline beyond a few major projects, Prime Philippines said Pangasinan is increasingly viewed as the next northern industrial province after Pampanga and Bulacan.
“In the south, Cavite’s development hotspots continue to be General Trias, Carmona, and Silang, where connectivity to SLEX, CAVITEX, and CALAX sustains their industrial appeal despite congestion challenges,” Prime Philippines said.
It added that Cebu is also contributing to the supply base, with developments such as DoubleDragon’s Centralhub adding to the country’s growing network of strategically located warehouses.
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