Despite the unexpected surge in economic growth during Q3 2025, future growth is anticipated to slow as trade-related sectors return to more typical activity levels following an intense period of preemptive actions in the year’s first half.

“The general economic outlook continues to be cautious due to tariff challenges and the reintroduction of certain tariffs. With risks leaning towards the downside, industrial and logistics firms may persist in delaying significant leasing choices,” the report stated.

Organizations hesitant to invest in new physical space or expansion might look into outsourcing to third-party logistics (3PL) providers as tariff conditions stabilize, thereby increasing demand for leasing from these providers. Companies entering new lease agreements are likely to favor flexible terms, such as shorter commitments and options for early termination. Cost efficiency is also a major concern, prompting tenants to optimize their use of existing space and enhance operational efficiency. Additionally, businesses are reassessing capital expenditure plans to prevent incurring excessive costs upon lease expiration or relocation.

Engage with the Real Estate Asia community

Although leasing activity may remain subdued in the short term, there is expected resilience in the demand for modern, high-specification industrial spaces as tenants continue to emphasize efficient use of space. Moreover, given the limited availability of new factory and warehouse developments on the horizon, rental prices and vacancy rates for high-quality industrial properties are projected to remain stable throughout the remainder of the year.