PHL may need 50M sq.m. of industrial space by 2035

THE PHILIPPINES may need at least 50 million square meters (sq.m.) of industrial space by 2035, with an estimated average price of P30,000 per sq.m., to accommodate surging demand from the manufacturing, logistics, and data center sectors, according to commercial real estate consultancy firm PRIME Philippines.

“By 2035, the major backbone of the Philippine economy will be the industrial sector. Industrial real estate is no longer just an asset — it’s the key to unlocking the Philippines’ economic future. The demand is here; the supply must follow,” PRIME Philippines Founder and Chief Executive Officer Jet Yu said during a briefing on Wednesday.

Warehouse supply grew by 4% to 37.6 million sq.m. in 2024, driven by new developments in Laguna, Batangas, and Cebu.

PRIME Philippines projected that supply would breach 40 million sq.m. this year, with upcoming expansions in Rizal, Cavite, Laguna, Pampanga, Cebu, and Davao.

Mr. Yu noted that about a third of the projected demand will come from the development of data centers, with over 100 data centers expected to go live in the country within the next three years.

“The 50 million sq.m. is a conservative-to-optimistic estimate. In just one or two years, we’re going to see many countries, including the Philippines, localizing and housing their own data domestically,” he said.

Mr. Yu added that the country’s manufacturing and logistics sectors are also expected to fuel industrial space demand.

“There has been a rapid decentralization across the Philippines. Logistics players have strategically positioned themselves over the past three to four years,” he said.

“On manufacturing, when many companies from China sought to diversify their operations to other ASEAN neighbors, we somewhat missed that opportunity. However, over the next ten years, we expect significant demand,” he added.

Meanwhile, Mr. Yu said the country’s manufacturing sector could continue to thrive amid geopolitical tensions.

“As long as we play it strategically and carefully, it’s safe to say that the manufacturing sector will continue to thrive in the Philippines,” he said.

“In 2025 alone, we have already received interest from companies looking to expand their existing manufacturing facilities in the Philippines. These are secondary hubs as a way for manufacturers to diversify and mitigate potential risks,” he added.

The United States paused its planned 25% tariffs on Mexico and China in exchange for concessions on border and crime enforcement.

However, US President Donald J. Trump said he is not rushing efforts to defuse a trade war with China, which was triggered by a 10% tariff on all Chinese imports.

In response, China imposed targeted tariffs on US imports and placed several companies, including Google, on notice for possible sanctions. — Revin Mikhael D. Ochave