Slow leasing momentum persists in Hong Kong’s industrial sector | Real Estate Asia
, Hong Kong

Slow leasing momentum persists in Hong Kong’s industrial sector

Warehouse vacancy increased to 5.5% in Q3.

According to a CBRE release, aggregate trade in Hong Kong continued to see negative growth although the situation improved slightly in June and July, falling 6.4% y-o-y in the two months combined after registering double-digit declines for four consecutive quarters. 

Container throughput dropped by 13.8% y-o-y but airfreight rebounded by 6.2% y-o-y over the same period.

Here’s more from CBRE:

Leasing momentum was stable with a more balanced contribution from various sectors. Retail-related demand included a luxury retailer consolidating to a 220,000 sq. ft. space at Goodman Westlink. Elsewhere, BYD took 100,000 sq. ft. in Hong Kong Spinners Industrial Buildings Phase 6 for its 4S centre.

Warehouse vacancy jumped to 5.5% from 2.5% due to the completion of Cainiao Smart Gateway. Excluding new supply, same-basket vacancy dropped to 1.9%

Low vacancy underpinned rental growth of 0.7% q-o-q, although this was contributed by just a few buildings. Growing future and shadow space is causing concern among landlords.

Samuel Lai, Executive Director, Head of Advisory & Transaction Services – Industrial & Logistics, CBRE Hong Kong: “With the trade sector remaining overall weak and that effective vacancy staying low, leasing momentum continued to be slow in Q3 2023. The pick-up in consumption market sentiment has started to see growing logistics demand from the retail sector, contributing 32% of the new leasing volume in Q3 2023. Fast diffusion of electric cars also saw some new motor brands actively looking for suitable space for their debuts and expansion plans in Hong Kong. Should economic recovery in mainland China accelerate to drive trade sector growth, the outlook of Hong Kong’s logistics sector should improve in the upcoming quarters. Low vacancy in traditional industrial areas might push logistics and warehouse operators to consider other available options in other outskirt districts in the coming seasons.”

 

 

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