Nearshoring reshapes industrial real estate demand

Savills said supply chains are being reorganised around resilience, proximity, and political alignment.

Global supply chains are being reorganised around resilience, proximity, and political alignment, placing industrial and logistics real estate at the centre of the next phase of globalisation, according to Savills.

The report said companies are no longer making production location decisions based mainly on cost. Instead, firms are weighing factors such as energy security, policy environment, labour costs, trade infrastructure, ESG standards, and proximity to consumers.

Savills said government intervention has increased sharply, with around 220 new investment policy measures introduced annually since 2022, a 75% increase from the pre-COVID average. Many of these measures focus on strategic sectors such as semiconductors, clean energy, digital infrastructure, automotive, electronics, and apparel.

The shift is also being driven by friendshoring and nearshoring, as investment increasingly flows between like-minded economies and production moves closer to key consumer markets.

The report noted that China remains a major manufacturing power, but companies are increasingly adopting China Plus One strategies to reduce supply-chain concentration. Mexico has overtaken China as the US’ largest import partner, whilst Vietnam is emerging as a key destination for firms diversifying away from China.

Savills said these changes are boosting demand for industrial and logistics facilities that can support more flexible and resilient supply chains. Businesses are moving from “just-in-time” models, which prioritised cost efficiency, toward “just-in-case” strategies that involve holding more inventory closer to consumers.

This has contributed to stronger warehousing demand, especially as companies seek to reduce exposure to future disruptions and improve delivery reliability.

Flexibility is also becoming more important in real estate decisions. Savills said third-party logistics providers are gaining market share as companies seek access to larger distribution networks without taking on long-term property commitments. In the US, 3PLs’ share of leasing activity rose from around 23% in 2020 to more than 40% in 2025.

Automation is another major factor shaping warehouse demand. More than 40% of manufacturing occupiers cited AI and automation as a core strategy for addressing labour costs and skills shortages, according to a 2025 survey cited by Savills.

Modern logistics facilities also require stronger power capacity, making energy security and price volatility increasingly important in site selection. Savills said more facilities are adding solar capacity, whilst other forms of on-site energy generation may become more common.

In Asia, Savills said warehouse users are increasingly treating logistics assets as a competitive tool, with automation helping improve performance and reduce exposure to labour shortages and rising operating costs.

The report concluded that globalisation is not retreating, but reorganising. Supply chains remain global, but production is becoming more politically aligned, regionally concentrated, and more responsive to risk.