Hong Kong warehouse rents record highest annual increase since 2014

Rents rose by 3.9% in 2021.

Leasing momentum in the industrial property market in Hong Kong softened in Q4 2021, largely due to lower space availability. 

According to CBRE, warehouse vacancy dropped a further 0.7-ppt in Q4 2021 to 2.3%, pulling the rate down by 1.3-ppt during the year. Vacancy in both ramp-access buildings and lift-access buildings tightened to below 3%.

Here’s more from CBRE:

Logistics operators were particularly active during Q4 2021, with local third-party logistics firms accounting for the period’s three largest deals, which totalled a combined 560,000 sq. ft. Electronics companies also displayed expansionary demand.

Warehouse rents rose by 1.0% q-o-q in Q4 2021. Full-year rental growth registered 3.9%, the biggest annual increment since 2014.

Samuel Lai, Senior Director, Advisory & Transaction Services – Industrial & Logistics, CBRE Hong Kong: “There were more expansion requirements throughout 2021 compared to the previous year, led by third-party logistics operators (3PLs) that accounted for over 50% of leasing activity in 2021. With a possible demand recovery from retail-related trades, leasing demand from 3PLs is expected to pick up. We also see a sustained and growing leasing demand from the tech and healthcare sectors. With limited space availability supporting rental growth in 2022, the industrial property sector is set to be the best performing sector across all commercial real estate sectors again.”