Property investors urged to focus on cold storage in the next 3 years

Hong Kong’s strong export rebound and rise in food consumption would increase this asset’s value.

The industrial sector in Hong Kong outperformed other key property sectors and continued to recover, with capital and rental appreciation recorded in Q2, according to Colliers. Warehouse rents increased 1.1% QOQ, contributing to a +3.5% rental rebound in H1 2021 after a -5.3% YOY drop in 2020.

John Davies, Head of Kowloon Office and Industrial Services, stated: “The industrial sector has seen positive performance so far this year, and we forecast YOY warehouse rents and prices to adjust by +5.0% and +6.8% in 2021, respectively.”

On the investment front, strata-titled industrial transactions of less than HK$100 million grew 280% QOQ from a low base, reaching HK$4.4 billion (US$0.6 billion).

“Given the strong export rebound (+24% YOY) and rise in food consumption, we recommend investors pay attention to cold storage in the next three years. This becomes even more appealing when considering the favourable government policy for industrial redevelopment, including the revitalisation scheme and standard rate measure, which is likely to continue positioning industrial assets as an attractive investment,” added Davies.