Hong Kong Industrial Sales and Leasing

Housing Investment Consultancy
Industrial Sales and Leasing Briefing

January 2019

Displacement demand is filling remaining vacancies in modern warehouses, which is supporting rental values in this niche segment despite uncertain business prospects for 3PLs.

The sales market saw en-bloc industrial deals hard to come by with the recent rate hikes and uncertainties over the US / China trade conflict holding back industrial investors, while end users remained active in pursuing suitable premises for owner-occupation.

The already tight availability in the modern warehouse market was further tightened by displacement demand relocating to Tsing Yi, with vacancy falling to 0.5%, fueling a further increment in modern warehouse rents over Q4.

The ongoing US / China trade conflict brought trade deals for affected goods forwards resulting in a surge in business for most 3PLs over the past few months, but dimmer prospects may lie ahead.

SUNeVision won the tender for the data centre site in Tseung Kwan O, creating a critical mass of high quality data centres in the district.  The HK$4,500 per sq ft AV paid for the site is likely to boost industrial site prices with similar potential.

The sales market is expected to continue to soften with investors remaining cautious because of the ongoing trade conflict and the upcoming revitalization policy.

With frontloaded logistics demand and displacement demand now past, the warehouse leasing market may be less active over the next few months.

 

Key contacts

Simon Smith

Simon Smith

Senior Director / Head of Research & Consultancy
Research & Consultancy

Two Exchange Square

+852 2842 4573

 

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