Hong Kong industrial investment hits US$939m in Q3

There were 17 major deals worth over US$12.8m each.

Data from Savills reveal that Hong Kong saw 17 major deals of over HK$100 million (approx. US$12.8m) in the industrial sector, worth a total of over HK$7.3 billion (approx. US$939m).

While investment funds were still keen to dip into the high yield logistics sector, Savills said there was more participation from logistics operators (for eventual owner-occupation) and developers (for redevelopment). 

Here’s more from Savills:

Significant fund transactions included Silkroad who bought various floors in Hang Wai Industrial Centre in Tuen Mun for HK$1.1 billion, AEW purchasing a 50% share of Minico Building in Chai Wan for HK$305 million, as well as Goodman acquiring a majority of floors in Hou Feng Industrial Building in Kwai Chung for HK$286 million, all for investment purposes. CR Logistics bought two en-bloc warehouses, East Asia Industrial Building Phase 1 in Tuen Mun, as well as Mineron Centre in Fanling for a combined HK$2.9 billion initially for investment, but likely with an eye for owner occupation after existing leases expire. Billion bought the entire Shui Hong Industrial Building in Kwai Chung for HK$498 million for redevelopment. 

While investment sentiment at the top end was robust with 30 transactions of over HK$50 million recorded in Q3, 43% higher than in Q2, the lower price bracket, mainly stratified units, was less active, with the industrial transaction volume below HK$50 million totalling 789 deals in Q3, a 31% QoQ decline, reflecting a more cautious attitude among smaller investors given the recent stock market turbulence. Flatted factory prices adjusted slightly by 0.3% in Q3/2021 as a result, while warehouse prices continued to rise by 3.2% over the same period.