Hong Kong Industrial Sales and Leasing

Housing Investment Consultancy
Industrial Sales and Leasing

July 2019

The impact of the US / China trade tensions has translated into declining cargo throughput and retail sales, as well as fewer industrial sales and leasing transactions over Q2/2019, with prices and rents remaining intact for the moment.

The sales market saw deal volumes declining due to external uncertainties, while major transactions were scarce.

Very few leasing transactions were concluded with many tenants adopting a cautious attitude given a worsening trading and retail performance over the first few months of the year.

With vacancy remaining tight (1.9% overall and 0.8% for modern warehouses), warehouse landlords were able to maintain their tough stance in negotiations, leading to further rental increases over Q2/2019.

The 20% plot ratio relaxation for industrial redevelopment proved to be an instant hit with at least 10 applications since the inception of the policy in October 2018, three of which have already been approved with a maximum plot ratio relaxation, showing Government’s intention to encourage such redevelopment.

Investment sentiment is expected to remain cautious with the ongoing trade situation and the volatile stock market, and volumes are expected to remain low while prices may hold up for another few months.

The weakening air and sea cargo throughputs put many logistics businesses under pressure, and though no large-scale contraction has yet to occur, the future for 3PLs looks less than promising if demand continues to shrink.


Key contacts

Simon Smith

Simon Smith

Senior Director
Research & Consultancy

Two Exchange Square

+852 2842 4573


Subscribe to Savills research


Would you like to be notified via email about new research?