Industrial property demand stays robust in first half of 2026, led by semiconductor and FMCG makers

Demand for industrial space in the Philippines remained strong in the first half of 2026, led by semiconductor, food and beverage, and FMCG manufacturers. Supply expanded with 230 hectares of new developments, while modern warehouse rents rose 8% and vacancy improved to 13.1%.

Industrial property demand in the Philippines stayed robust in the first half of 2026, led by semiconductor, food and beverage, and fast-moving consumer goods (FMCG) manufacturers seeking modern facilities near ports and expressways amid rising fuel costs tied to the Middle East conflict, according to Colliers Philippines.

Colliers recorded the delivery of 230 hectares of new industrial supply in Southern and Central Luzon in the period, including TARI Estate in Tarlac, and expects another 190 hectares by yearend, mostly in Cavite. Central Luzon is expected to be a major source of new industrial space beyond 2026, supported by infrastructure projects such as the Luzon Economic Corridor and the proposed Clark AeroDistrict.

Rental rates for traditional warehouses across the Calaba (Cavite-Laguna-Batangas) corridor, Central Luzon, and Metro Manila softened 3% from the previous half, while average lease rates for modern warehouses in those locations grew 8%. Industrial vacancy improved to 13.1% from 14.1% at end-2025, driven by stronger absorption. In Central Luzon, warehouse vacancy dropped sharply to 14.1% from 23% at end-2025.

Bulacan remains a primary site for new warehouse construction, particularly in Plaridel, Pulilan, Guiguinto, and Pandi, where e-commerce is driving demand. FMCG, equipment manufacturing, and agro-industrial firms took up space in Pampanga and Tarlac. A notable transaction was the expansion of Monde M.Y. San Corp. at TECO Industrial Park in Mabalacat, investing P5 billion ($83 million) in a new facility for its SkyFlakes crackers and other products.

Colliers noted that higher-value industries are clustering in Central Luzon, with companies such as Ajinomoto and Coca-Cola already operating there, along with new entrants including electric vehicle and fiber cement manufacturers. The region is emerging as a major centre for employment, investment, and domestic production.

Colliers believes it is an opportune time for landlords to retrofit and renovate existing facilities given rising demand for modern warehouses, which feature floor-to-ceiling heights of 12 to 14 metres, floor-load capacities of up to five tons, and fire sprinkler and lighting systems. Some operators are further automating with robotics and conveyor systems. Greater industrial diversification could help cushion the sector from rising logistics costs and the Middle East conflict, the firm said.