Hong Kong industrial vacancy hits 8-year low of 1.4% in Q2

This is despite a slow leasing momentum in the quarter.

According to CBRE, leasing momentum in Hong Kong’s industrial property market was slow in Q2 2022 due to limited space availability. However, vacancy edged down to 1.4%, the lowest level since Q4 2014.

The bulk of demand in Q2 2022 came from local 3PLs while requirements from government departments rose once again over the quarter.

Warehouse rents increased by 2.5% q-o-q, bringing H1 2022 growth to 4.8%.

Samuel Lai, Executive Director, Advisory & Transaction Services – Industrial & Logistics, CBRE Hong Kong said: “External demand in the beginning of 2022 weakened due to the 5th wave of COVID-19 and a disruption in China’s supply chain caused trade and logistics related sectors to register a sharp slowdown in Q1 2022. Nevertheless, the significant leasing demand contributed by the Hong Kong government and the improved leasing momentum driven by domestic demand in the first half of 2022 caused industrial properties to outperform other sectors once again. A further drop in space availability will ensure further rental growth in H2 2022. Tenants are advised to keep a close eye on suitable options as competition for space remains fierce.”