PRIME Philippines records 292,000 square meters of industrial requirements in 2026 Q3, up 102 percent year on year, as occupiers weigh total operating costs and developers take a more cautious approach to new supply.
Luzon’s industrial property market strengthened in the third quarter of 2026, with PRIME Philippines recording approximately 292,000 square meters of industrial requirements, up 102 percent from about 145,000 square meters in the same quarter of 2025.
Demand has now strengthened for two consecutive quarters after reaching approximately 116,000 square meters in 2026 Q1, signaling renewed expansion activity among industrial occupiers.
Transportation and storage remained the largest source of classified demand at approximately 47 percent, followed by wholesale and retail trade at 19 percent and manufacturing at 18 percent. PRIME also recorded requirements from food and beverage, construction, power generation, and other service activities.
However, PRIME sees a more important shift beyond the increase in volume occupiers are becoming more strategic and specific about the industrial properties they require.
“Industrial demand has doubled, but what is equally important is that occupiers now have a much clearer understanding of what they need,” said Rosario, Executive Vice President for Industrial Tenant Representation at PRIME Philippines. “The decision is no longer simply about rent per square meter. Companies are looking at the total cost and efficiency of operating from a location from transportation and logistics to manpower, utilities, supply-chain access, and the technical specifications of the facility.”
This is resulting in increasingly specific requirements for warehouse size, clear height, loading configurations, truck circulation, power capacity, accessibility, and future expansion capability.
For many occupiers, a warehouse expansion is therefore no longer simply a real estate transaction. It is becoming a strategic supply-chain and operating decision.
Quarterly Warehouse Demand in Luzon
Rents Rise Across the Board
Landlords in supply-constrained areas are raising rates as demand returns and modern facilities reach completion. Average rents year on year in all six markets PRIME tracks. Metro Manila led with a 11.8 percent increase to PHP 259 per square meter, followed by Pampanga at 5.2 percent to PHP 163 and Bulacan at 1.6 percent to PHP 180. Rents in Cavite reached PHP 248, Laguna PHP 225, and Batangas PHP 257.
Average Industrial Lease Rates by Province, 2025 Q3 versus 2026 Q3
Across the Luzon markets PRIME monitors, occupied industrial space stands at 40.5 million square meters, with 2.1 million square meters unoccupied, an occupancy rate of about 95 percent. Unoccupied space continues to build in Central Luzon as new completions arrive, but the market keeps absorbing them gradually.
A Pipeline Moving Inside the Gates
About 118,000 square meters of new warehouse space is scheduled for completion in 2017 and 268,000 square meters in 2028. Bulacan leads the 2017 pipeline 89,835 square meters as expansion spread north from Meycauayan, while Batangas accounts for 150,000 square meters in 2028. Of the 2027-2028 pipeline, 56 percent will be built inside industrial park, reflecting occupiers’ preference for quality space and the fiscal benefits of accredited parks.
New Demand Drivers on the Horizon
Beyond logistics, PRIME sees fresh demand from the electronics supply chain and from retailers following consumers out of the capital, as the value of production for electronics, computer, and optical products has grown by double digits year on year since October 2025, rising 17.2 percent in July 2026.
The Philippines is fast becoming the back office of the global AI chip boom. Semiconductor exports surged 73.5 percent year on year to USD 5.2B in August 2025. They now make up roughly 85 percent of the country’s major electronic export categories. Production value for electronics, computer, and optical products has grown by double digits year on year every month since October 2025. The growth is narrow but deep, and its flavors ecozone facilities with cleanroom-ready space and reliable power over generic warehouses.
Retailers, meanwhile, are following consumers out of Metro Manila. In 2025, CALABARZON and Central Luzon each recorded more approved construction floor area than the capital, at 8.6M and 7.9M sqm against 6.8M sqm. Central Visayas, fourth nationwide at 3.2M sqm, is emerging as the next frontier. Discount grocers and convenience chains are placing distribution centers to match. Alfamart supplies over 2,300 Luzon stores from hubs in Pampanga, Cavite, and Quezon. DALI has is a new tier of warehouse demand in secondary nodes, well beyond the traditional Metro Manila logistics belt.
“Warehouse demand in Luzon doubled in a year as logistics firms move closer to the consumer,” the briefing states.
Upcoming Warehouse Supply by Province, 2027-2028
About PRIME Philippines
PRIME Philippines is the country’s fastest growing and most disruptive commercial real estate advisory firm. Established in 2013, PRIME has redefined the brokerage industry by replacing outdated practices with innovation, data intelligence, and relentless execution. With full-service offices in Manila, Cebu, and Davao, PRIME has completed over 300 high-impact projects nationwide. Backed by a team over 100 professionals, PRIME is multi-awarded and trusted by the country’s top developers, investors, and occupiers. It is involved in big ticket office transactions and holds the No. 1 position in industrial leasing nationwide.
REFERENCE: PRIME Philippines
