Asia Pacific’s manufacturing boom raises demand for high-tech facilities

Asia Pacific's manufacturing sectors are prompting substantial shifts in the requirements for industrial real estate across the region.

According to a new report by real estate services firm JLL, the growth of the semiconductor, automotive, pharmaceuticals, biotechnology, and renewable energy equipment sectors is driving a move towards more sophisticated industrial facilities. The report highlights that these four key sectors, identified as central to a projected USD $1 trillion manufacturing industry boom, have increasingly complex technical and operational needs that far surpass those of traditional warehouses and factories.

Facility demands

JLL's analysis finds that requirements for large-scale facilities, higher-specification buildings, specialised technical equipment, and infrastructure are meeting rising demand in advanced manufacturing. The complexity of production processes, especially in semiconductors and pharmaceuticals, means facilities must offer cleanrooms conforming to specific ISO classifications, as well as advanced heating, ventilation, and air conditioning (HVAC) systems comprising HEPA and ULPA filtration for contamination control.

"Advanced manufacturing will define the next chapter of Asia Pacific's industrial real estate narrative. We're witnessing a structural transformation where advanced manufacturing is demanding industrial facilities that function more like high-tech laboratories than conventional factories. This evolution is creating both challenges and opportunities for industrial landlords who must adapt to meet increasingly complex tenant requirements," said Elizabeth Low, Director of Research, Asia Pacific at JLL.

Across all four sectors, JLL research identifies 11 essential requirements driving changes in industrial real estate. These include large floor plates, heavy floor loading capacity, and enhanced fire protection systems. More specifically, floor loading requirements have intensified, increasing to 3-7 tons per square metre, but in the automotive and renewable energy equipment sectors, demands can escalate to 10 tons or more.

Clear height requirements are also evolving; while 8 metres or more is common for most facilities, renewable energy equipment assembly is seeing needs extend to 25 metres or more due to the scale of the components involved.

Electrical capacity and leases

The sectors' growing dependency on automated and robotics-based production also raises the need for robust power infrastructure. Semiconductor fabrication plants, automotive assembly sites, and battery manufacturing facilities all push for electrical systems with far greater capacity than in conventional industrial real estate, requiring updated grid connections and in some cases, dedicated substations.

This technical complexity is influencing leasing arrangements. There is an increase in longer-term leases and more reliance on build-to-suit facilities. As the costs of delivering these advanced features rise, property owners can secure premium rents and secure long-term agreements from manufacturing tenants in sectors expected to see sustained growth over the coming years.

"As manufacturers continue adopting China+N strategies and supply chain diversification, industrial real estate providers across the region must prepare for increasingly sophisticated tenant requirements that will define the next generation of manufacturing facilities. These industries represent attractive, sticky tenants for industrial landlords, but they come with significantly more complex operational requirements," said Ben Horner, Executive Director, Industrial & Logistics, Asia Pacific at JLL.

Regional landscape

The report points out Asia Pacific's dominant role in these growth sectors. The region accounts for over 60% of global semiconductor revenue and contributed 74% of new renewable energy capacity additions in 2024. Within Asia Pacific, China remains the leader in several manufacturing categories, while Taiwan is known for its advanced semiconductor capabilities. South Korea's manufacturing base offers particular technological sophistication, and economies such as India and those in Southeast Asia are leveraging lower costs to attract manufacturing investment that might otherwise have gone to China.

The evolving landscape for industrial real estate in Asia Pacific is set to continue, as tenants from advanced sectors seek facilities tailored to their specific needs and as property owners adapt to stay ahead of demand.