Delivering Recovery | Capturing Opportunities in the Next Logistics Warehouse Cycle

China’s warehouse logistics supply peaked during the 14th Five-Year Plan from 2021 to 2025. The significant influx of new supply resulted in a substantial decline in occupancy and rents while also dampening development and investment appetite. The story during the 15th Five-Year Plan, which commenced earlier this year and will run until 2030, will be markedly different, however, with new logistics warehouse supply expected to decline sharply during this period.
 
Despite the gradual withdrawal of government stimulus and slowing cross-border e-commerce expansion, net absorption reached 4 million sq. m. in H1 2026. For the 2026-2028 period, CBRE expects China's manufacturing upgrading and rising 3PL outsourcing penetration to provide sustained growth momentum for logistics warehouse demand, with average annual net absorption expected to reach levels comparable to the 2023-2024 period. This should ensure vacancy contracts sharply to 11% by the end of 2028.
 
Each region is at a different stage of the market cycle. Rents in West and Central China are already showing signs of bottoming out, while rents in most East China markets will enter the recovery phase during 2026-2028, establishing these cities as optimal locations for near-term investment. Relatively less attractive markets include the Beijing-Tianjin-Langfang area in North China, where vacancy remains at 30%. South China is currently experiencing a supply peak requiring a longer destocking period, with a recovery not expected until around 2029-2030.