Indonesia and Vietnam could see demand for manufacturing-related real estate rise by as much as 20 per cent over the next three years as global companies redirect supply chains and capital out of China, property consultancy Knight Frank said in a report published on Tuesday.
Demand for industrial real estate could rise by 15 to 20 per cent in Indonesia, led by the electronics, automotive and logistics sectors, as firms seek long-term, purpose-built facilities amid a US-China tariff war.
Vietnam, a major beneficiary of China-related supply chain diversification, could experience an increase in demand for industrial real estate of up to 20 per cent, the report said, “reflecting sustained interest from international occupiers, particularly large Chinese mainland e-commerce firms seeking logistics facilities over 100,000 square metres”.
Knight Frank’s projections come after China and the US last week agreed to a 90-day truce on tariffs. China said it would lower duties on US imports to 10 per cent from 125 per cent, while the US would cut its tariffs to 30 per cent from 145 per cent.
“While the temporary tariff reduction provides companies with breathing room, the ‘China+N’ strategy has become a standard operating model rather than just a response to tariffs,” said Tim Armstrong, Knight Frank’s global head of occupier strategy and solutions.
The firm added that uncertainties related to corporate relocation decisions reinforced demand for short-term leases and flexible, plug-and-play logistics parks.
