Escalating economic uncertainty, the US-China trade dispute and disappointing manufacturing sector data have prompted logistics occupiers to become more cautious toward expansion, according to CBRE’s Asia Pacific Real Estate Market Outlook 2019: Mid-Year Review.

Demand has been led by domestic consumption–driven occupiers, which have cushioned the slowdown in activity from export-related manufacturers and trading companies. But the growth of omnichannel retail will continue to drive solid leasing demand for urban logistics space.

Rental growth will remain solid as competition for space intensifies amid strong demand from cold-chain logistics, high-end manufacturers and data centre operators. Emerging Southeast Asia and India will benefit from the mid- to long-term manufacturing shift, which will create more opportunities for logistics development and investment.

But while CBRE makes no major revision to its rental forecast for logistics in the Asia