Rents on logistics properties in mainland China extended a slump into the first half of this year, with experts forecasting little relief in the coming months as more companies choose to relocate their operations outside the country to hedge against rising US-China trade tensions.
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Rents declined 12.8 per cent in the first six months from a year earlier, property consultancy Knight Frank said in a report on Wednesday. The market weakened by 14.1 per cent in the July to December period last year.
Beijing and Shanghai, China’s main commercial centres, highlighted the shrinking demand as rents tumbled 17.2 per cent and 11.3 per cent, respectively, this year. The vacancy rate climbed to 28.9 per cent in Beijing and 26.8 per cent in Shanghai, and the worst may yet be ahead given US President Donald Trump’s tariff war.
“The prospect of rents bottoming out is unlikely within the next 12 months,” said Christine Li, Asia-Pacific head of research at Knight Frank, citing US-China trade tensions as a key driver of client relocation. “Beyond that, it’s a wait-and-see on how Trump’s policies will shift trade in the region.”
Logistics property owners are losing out to their rivals in India, Knight Frank’s data showed. The South Asian nation reported the strongest logistics rental growth in the Asia-Pacific region, driven by sustained demand from the manufacturing sector. Rents climbed 3.4 per cent, versus 2.1 per cent in the second half of 2024.
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