The industrial sector demonstrated some resilience in Q4 2024, driven by stabilizing rents and a recovery in air freight, despite some challenges in retail sales, according to Savills in its Market in Minutes – Hong Kong Industrial Sales and Leasing report of March 2025.
- Industrial sector shows resilience in Q4 2024 with reviving demand.
- Rents stabilize due to increased demand in regional distribution and air freight recovery. Air freight experiences robust recovery with a 9.6% growth.
- YoY growth in imports (2.9%) and exports (3.6%) reflects improving macroeconomic conditions.
- Online retail sales and retail sales decreased by 4.1% and 6.7% YoY respectively.
- Industrial strata-sales activity rebounds with a 38% increase QoQ in transaction volume.
- End-users may emerge as the primary buyers in the market.
Mr. Jack Tong, Director, Research & Consultancy of Savills commented, “The industrial sector showed resilience in Q4 2024, with rents stabilizing due to demand in regional distribution and air freight recovery, while sales volume was also boosted by consecutive rate cuts towards the end of 2024.”
Mr. James Siu, Deputy Managing Director, Head of Kowloon of Savills said, “Looking ahead, the recovery in trade, air freight (especially for high-value goods), and e-commerce demand is expected to support the logistics sector. However, ongoing northbound travel trends may negatively impact the retail and F&B sectors, threatening logistics demand for retail and cold storage, which are already declining. With additional warehouse space set to be released in 2025 and half of the CaiNiao Smart Gateway—totalling 2.1 million square feet—becoming available, warehouse rents may experience volatility over the next 12 months.”
Mr. Oscar Chow, Senior Director, Deputy Head of Industrial & Kowloon Commercial Sales of Savills said, “Investment sentiment improved in Q4 due to consecutive rate cuts, lowering the cost of funds for industrial investments. However, as the pace of rate cuts is expected to slow in 2025, this positive momentum may be tempered. Additionally, ongoing declines in commercial prospects could make redevelopment infeasible, leading end users to become the primary buyers in the market and limiting broader investment activity.”