New industrial leasing volume in Hong Kong hits 10-year low in H1

Only 1.18m sq ft was registered during the period, the lowest level since 2015.

Uncertainties towards the global trade market outlook has caused logistics operators and traders to turn cautious in H1 2025. According to CBRE data, leasing demand weakened noticeably.

“New leasing volume stayed slow for a second consecutive quarter, making the 1.18 million sq. ft. registered for H1 2025 the lowest for a half-yearly period since H1 2015.”

Here’s more from CBRE:

While leasing activity was primarily driven by relocations combined with potential downsizing, 100,000 sq. ft. at Cainiao Smart Gateway in Chek Lap Kok was leased, while a total of 92,000 sq. ft. in China Merchants Logistics Centre in Tsing Yi was leased, partly for the storage of metals for the London Metal Exchange.

Warehouse vacancy increased by 0.4 percentage point quarter-on-quarter to 10.3%.

Prolonged and elevated vacancy contributed to a 0.8% quarter-on-quarter decline in warehouse rents over the quarter, the sixth consecutive quarterly drop and bringing the year-to-date decline to 2.9% as of end of H1 2025.

Samuel Lai, Executive Director, Head of Advisory & Transaction Services – Industrial & Logistics, CBRE Hong Kong: “Escalating geopolitical tensions and uncertain trade policies in the first half of 2025 prompted a more cautious approach from warehousing occupiers. We observed a sharp decline in leasing demand, leading to increased availability of space in the market. Leasing activity was largely driven by relocations, often accompanied by potential downsizing. This resulted in escalated vacancies and weighed on rents, which declined by 2.9% as of the end of H1 2025. While overall sentiment is expected to remain cautious in the short-term, Hong Kong which is approved as a delivery point for the London Metal Exchange, will see an increasing demand for high-spec warehouses for metal storage in addition to the four facilities already approved to date.”