Vacancy in Hong Kong's logistics space predicted to dive further

There won't even be new completions this year.

It has been noted that 2015 will see continued demand for modern warehousing and logistics space in APAC, driven by the development of organized retail in emerging markets and the strong growth of e-commerce.

According to a research note from CBRE, rental growth continues to increase but at a slower pace, despite a surge in new supply. Key themes in the APAC industrial and logistics sector for 2015:

Further, rental growth in Hong Kong will be powered by robust demand and lack of modern logistics facilities. Exports of goods and services will continue to grow at 6.1%.

Her's more from CBRE:

Strong logistic rents on the back of strong demand, particularly in Hong Kong, Osaka and Shanghai, is expected. CBRE forecasts overall logistics rental growth in Asia Pacific of 2.9%, significantly down from 7.1% in 2011.

Demand from 3PLs and retailers in Hong Kong is steady. The territory will continue to experience a supply-side squeeze for logistics facilities due to high rent and low vacancy environment.

3PLs will continue to use Hong Kong as a major trans-shipment hub due to Mainland cabotage regulations.

Hong Kong - No new completions scheduled for 2015. Vacancy will continue to drop. Demand-Supply imbalance will prompt occupiers to purchase warehouse premises for self-use, and result in further yield compression.