Hong Kong warehouse rents inch up 1.1% in Q2

Limited availability and robust demand from 3PLs drove up rents.

According to Colliers, third-party logistics players (3PLs) remained the main support of the industrial rental market in Hong Kong in Q2 2022, while the market also saw healthy demand from the electrical and frozen food/beverage sectors. Coupled with tight availability and no new warehouse supply recorded during the quarter, rent of overall warehouses recorded 1.1% QoQ growth.

The outbreak of the fifth wave, however, delayed the expansion plans of some F&B operators and retailers and led to a relative slowdown in requirements from central kitchen operators or retailers in H1 2022 compared to H2 2021. 

With online retail sales growing 29% YoY for the first five months, Colliers believes the e-commerce industry will be a key driver to support the demand for industrial space going forward. Overall, it expects leasing enquiries for purposes such as logistics hubs to pick up in H2 2022, supporting warehouse rent to see a full-year forecasted growth of 3.5% YoY.

“On the investment front, we expect to see more deals with landlords or institutional investors partnering with 3PLs, cold storage, self storage or data centre operators by arranging long leases so as to lock in long-term revenue. We expect industrial properties will continue to be the most popular asset type for institutional investors given their resilient performance compared to office and retail. Overall, we expect growth of 5% for warehouse prices in 2022,” said Bill Chan, Head of Industrial Services at Colliers Hong Kong.