Hong Kong industrial rents grow 1.2% in full-year 2023

Rents inched up by 0.1% in Q4.

In general, the industrial leasing sentiment in Hong Kong weakened in 2023 due to weak global trade demand. According to data from CBRE, new leasing volume for the sector fell from 6.3 million sq. ft. in 2022 to 2.9 million sq. ft. in 2023.

Some emerging sectors were expanding. Electric vehicle dealers and I&T firms were the more active sectors.

Here’s more from CBRE:

Warehouse vacancy climbed from 2.5% to 5.3% over the year due to the completion of a new project in Chek Lap Kok. Excluding the new supply, vacancy for the rest of the market edged down 0.8-ppt to 1.7%.

Despite the sour sentiment and new supply, single-digit vacancy supported rental growth of 0.1% q-o-q in Q4 2023, bringing the full-year rental growth to 1.2% y-o-y.

Samuel Lai, Executive Director, Head of Advisory & Transaction Services – Industrial & Logistics, CBRE Hong Kong: “Weak trade flow ensured a subdued leasing environment for industrial properties in 2023. Traditional occupier groups such as 3PLs were slow in leasing, but emerging trades brought some new demand for space. The outlook for 2024 would depend on the pace of recovery of global trade flow. Further strengthening of the Chinese economy will gradually improve Hong Kong’s exports and hence potential demand for logistics space. The return of some expiring space in H1 2024, however, will require landlords to remain flexible. Warehouse rents are expected to edge down within a 5% range in 2024.”