IN Brief:
- GLP China sees occupancy recovering as pandemic-era warehouse oversupply is absorbed.
- Average occupancy reached 83% by end-2025, with some Q1 leases achieving 4.6% rental growth.
- E-commerce, grocery, automation-heavy occupiers, data centres, and rooftop solar are reshaping warehouse demand.
GLP sees China’s logistics property market moving into a more stable phase, with warehouse oversupply beginning to ease and demand strengthening from e-commerce, grocery, manufacturing, automation, and digital infrastructure occupiers.
The company’s China portfolio ended 2025 with average occupancy of around 83%, still below the 85% level generally associated with a more balanced market but stronger than the weakest points of the recent cycle. During the first quarter of 2026, some new leases achieved rental growth of 4.6%, suggesting a selective recovery led by better-located and better-specified assets.
The improvement follows several years of pressure across China’s logistics property market. Rapid warehouse construction during the e-commerce boom created a wave of new capacity, while weaker consumer demand and uneven manufacturing growth left parts of the market with elevated vacancy and falling rents.
Demand is now becoming more varied. Online retail remains a major source of activity, but grocery, discount retail, sportswear, automated fulfilment, energy infrastructure, and data centres are also shaping leasing decisions. Major occupiers are using logistics property not only to hold stock, but to redesign fulfilment models around speed, density, energy use, and proximity to consumers.
Grocery and discount retail require high-volume distribution close to population centres, while sportswear and fashion occupiers need fast-moving fulfilment networks that can handle product variety and promotional peaks. For logistics landlords, that places a premium on buildings that can support automation, stronger power requirements, rapid vehicle turnaround, and more intensive use of floorspace.
Older warehouse stock can quickly lose competitiveness when occupiers need robotics, high-density storage, automated sorting, or integrated data systems. Clear height, floor loading, mezzanine potential, fire safety, yard depth, and electrical capacity are now central to many tenant decisions. The building itself is becoming part of the operating system, rather than a passive storage box.
China’s industrial policy is likely to reinforce that shift. IN Supply recently covered how China is putting robotics at the centre of industrial strategy, with automation being pushed deeper into manufacturing and logistics. The same pressure is visible in Hong Kong, where Geek+ and OMLOG doubled fashion fulfilment productivity through a goods-to-person robotics system.
As automation moves from isolated projects into wider fulfilment networks, landlords with suitable buildings gain an advantage. Automated systems require not only capital investment from the occupier, but a property specification that can support installation, maintenance, energy demand, fire protection, and safe movement around people and machines.
GLP’s China strategy also shows the growing overlap between logistics property and energy infrastructure. Data centres are becoming a larger part of the company’s portfolio, while rooftop solar is turning warehouse space into a distributed energy asset. For occupiers, lower operating costs, stronger resilience, and clearer decarbonisation routes are increasingly tied to building choice.
The recovery remains uneven by region and asset type. China’s manufacturing base, export flows, and consumer markets are not moving at the same pace, and older facilities may need refurbishment or repositioning to compete. Newer sites with automation-ready specifications, better power access, and stronger transport links are likely to capture a greater share of demand as occupiers become more selective.
For developers and investors, the market is moving away from volume-led expansion and toward asset quality, energy performance, and tenant fit. For occupiers, a tightening market for the best-located and best-specified space could return upward pressure on rents in core corridors. China’s warehouse cycle has not fully reset, but the first signs of absorption suggest the weakest phase of oversupply is giving way to a more disciplined logistics property market.