Hong Kong warehouse vacancy grows to a record 11.8% in Q3

This drove landlords to lower rents.

In a recent report, CBRE revealed that leasing momentum in Hong Kong’s industrial sector remained subdued as occupiers proceeded with caution amid ongoing global trade uncertainty.

Leasing volume reached 1.8 million sq. ft. y-t-d, representing just 55% of full-year volume for 2024.

Here’s more from CBRE:

Warehouse vacancy increased 1.4-ppt q-o-q to 11.8%, a record high as tenants continued to implement cost-saving strategies. Mounting vacancy pressure prompted landlords to lower rents to remain competitive.

Overall warehouse rents continued to decline, falling by 3.7% q-o-q. This brought the y-t-d decline to 6.5% and the drop from the peak achieved in Q4 2023 to 10.9%.

Samuel Lai, Executive Director, Head of Industrial & Logistics, CBRE Hong Kong: “Geopolitical tensions and uncertain trade policies continue to weigh on Hong Kong’s industrial and logistics market. Logistics occupiers remain cautious and focused on cost-saving strategies, which are driving leasing activity in the short term. While expansionary demand is limited, emerging sectors are showing resilient interest. Warehouses offering greater operational efficiency and competitive rental rates are seeing the strongest demand, as companies seek to optimise costs. Tenants are also prioritising facilities with modern specifications that support automation and technological upgrades to enhance productivity.”