Hong Kong industrial rents register a 3.7% increase for full-year 2022
Warehouse vacancy increased slightly to 3.3%.
In H2 2022, warehouse rents in Hong Kong were up 2.0% HOH, which was less significant compared to H1 2022. The severe inflation in Europe and America weakened their purchasing power.
At the same time, Colliers said in a report that another Covid wave dragged on China’s economic growth. These factors contributed to a decline in the import demand of Hong Kong’s trading partners. Hong Kong’s total export value dropped by 11% YOY in the July to October 2022 period.
Here’s more from Colliers:
Third-party logistics operators (3PL), the most important source of demand for industrial leasing, slowed their pace of leasing. Nevertheless, the booming e-commerce sector triggers consistent demand for 3PL services. As of Nov 2022, Hong Kong’s total online sales surged by 22% YOY over the first 11 months on the year.
2022 year-end warehouse vacancy increased slightly to 3.3%, mainly due to completion of the new ramp access logistics centre in Tuen Mun. However, warehouse and general industrial space with good specifications like high floor loading and height are still sought after by occupiers.
The Hong Kong government has lifted a series of Covid control measures since the new government come on board in July 2022, and economic activity gradually normalised in H2 2022 after Covid’s 5th wave in Hong Kong. Sectors like F&B (both wholesalers and central kitchens), self storage operators and even retailers resumed their expansion plans, driving industrial leasing activities.
General industrial rents maintained a similar growth trajectory from H1 to H2 2022, recording full-year growth of 3.7% YOY.