Industrial leasing market weakens in Q3
Warehouse vacancy rates rose to 8.4%.
The industrial leasing market in Hong Kong experienced a softened momentum in the third quarter, as landlords prioritised occupancy over rental rates, according to CBRE Hong Kong.
This resulted in a 1% quarter-on-quarter drop in warehouse rents. Key leasing deals included SF Supply Chain securing 137,400 sq ft in Mapletree Fanling Warehouse and 97,800 sq ft in Smile Centre, also in Fanling.
Warehouse vacancy rates increased by 0.47 percentage points to 8.4%, largely driven by rising vacancies in areas such as Tsuen Wan, Tuen Mun, Yuen Long, and Sha Tin.
On the trade front, Hong Kong saw a 9.3% year-on-year (YoY) increase in aggregate trade for July and August, bringing the year-to-date total to $6.1t, approximately 70% of last year's total. If this trend continues, full-year trade could surpass 2023 levels, CBRE noted.
Container throughput, however, declined by 6.8% YoY, whilst airfreight showed stronger performance, rising 12.5% YoY.
Samuel Lai, Executive Director and Head of Advisory & Transaction Services - Industrial & Logistics at CBRE Hong Kong, believes that Hong Kong’s trade flow and logistics sector could benefit from the global interest rates ease and China’s economic recovery, leading to improved warehouse demand in the coming quarters.