Colliers: Central Luzon industrial demand to rise on high-value manufacturing, Pax Silica
Industrial demand in the Philippines remained robust in H1 2026, led by semiconductor, FMCG and food firms seeking modern warehouses near ports and expressways. Colliers reports 230 ha of new supply in Southern and Central Luzon, while vacancy improved to 13.1% and modern warehouse rents rose 8% HoH
Industrial demand in the Philippines remained robust in the first half of 2026, led by semiconductor, food and beverage, and fast-moving consumer goods manufacturers seeking modern facilities with strategic access to ports and expressways, according to Colliers Philippines. Central Luzon will be a major contributor to new industrial space beyond 2026, a plus for property firms with growing industrial footprints in the region.
Supply expanded with 230 ha of new industrial developments in Southern and Central Luzon, including TARI Estate in Tarlac, while another 190 ha are expected by yearend, mostly in Cavite. Rental rates softened for traditional warehouses across Cavite, Laguna, Batangas (Calaba), Central Luzon and Metro Manila, but modern warehouse rents continued to rise. Industrial vacancy improved to 13.1% from 14.1% at end-2025 due to stronger absorption.
Colliers recorded a 3% correction in average rents for traditional warehouses across Southern Luzon, Central Luzon and Metro Manila half on half in H1 2026. Meanwhile, average lease rates for modern warehouses in these locations grew by 8% HoH during the period. Colliers believes this is an opportune time for landlords and developers to retrofit and renovate existing facilities, given the heightened demand for modern warehouses.
Data from the Philippine Statistics Authority show that logistics cost inflation reached 16.8% in Q2 2026, a 21-year high. Colliers recommends that developers highlight their facilities’ proximity to major infrastructure, expecting more e-commerce and export-oriented firms to locate within micro-warehouses, distribution centres and factories with direct access to highways, toll roads and ports.
The Central Luzon industrial sector is also likely to benefit from the Pax Silica initiative, a 4,000-acre semiconductor and advanced hardware manufacturing hub. Colliers sees the project complementing the Luzon Economic Corridor and boosting industrial activities across Clark, Subic, Batangas and Manila, with positive spillover effects on residential, office and hospitality segments. However, Colliers flags risks including environmental concerns, critical mineral sourcing and geopolitical conflicts, and recommends a massive information campaign by the government to address public concerns.
