Hong Kong warehouse leasing hits four-year high in Q2

Leasing demand more than doubled vs last year and reached 1.6m sq ft.

Hong Kong's industrial and logistics market recorded its strongest leasing quarter in four years during Q2 2026, driven by occupier expansion and relocation demand, according to CBRE.

New warehouse leasing reached 1.6 million sq ft during the quarter, up 118% year-on-year and the highest quarterly volume since Q2 2022. CBRE attributed the increase to expansion by electronics-related occupiers and forced relocations arising from brownfield redevelopment in the Northern Metropolis.

The stronger leasing market came as Hong Kong's external trade remained robust, with aggregate trade increasing 42.5% year-on-year in April and May following 34.6% growth in the first quarter. Air cargo throughput also rose 3.9%, although container throughput slipped 1.1%.

According to CBRE, warehouse vacancy declined by 1.2 percentage points to 11.6%, reflecting positive net absorption of 569,200 sq ft, the strongest level since Q3 2023. However, landlords continued to lower asking rents to improve occupancy, resulting in warehouse rents falling another 2.2% q-o-q. This marked the tenth consecutive quarterly decline, leaving rents 15.6% below their Q4 2023 peak.

CBRE said the combination of business expansion and redevelopment-related relocations has helped absorb vacant space, although rental recovery is likely to remain gradual as landlords prioritise occupancy.