2022-11-01-莱坊-Hong_Kong_Industrial_Summary_Q3_2022_3页_323kb

Hong Kong Industrial Summary - Q3 2022

Core Content

Q3 2022 saw continued improvement in Hong Kong's industrial leasing market, driven by strong demand from the logistics sector and limited supply. Rent levels for both general industrial buildings and modern logistics facilities showed fair growth, with general industrial buildings at HK$11.6 per sq ft per month (up 3.8% YoY) and modern logistics at HK$16.5 per sq ft per month (up 3.7% YoY). Vacancy rates remained low, at 3.3% for modern logistics and 2.4% for general industrial buildings.

Main Highlights

• Leasing Activity: Strong leasing demand was observed, especially from the logistics sector. Major transactions included:

  • 48,178 sq ft at Ever Gain Centre in Shatin (Drinks Distributor)
  • 28,226 sq ft at Lung Fung Group Centre in Fanling (Logistics)
  • 16,253 sq ft at ATL Logistics Centre in Kwai Chung (Logistics)
  • 12,000 sq ft at Sunshine Kowloon Bay Cargo Centre in Kowloon Bay (Recycling)

• New Supply Impact: The newly delivered Goodman Westlink logistics warehouse in Tuen Mun, adding 1,500,000 sq ft to the market, may cause short-term rent pressure. However, relocation demand due to land resumptions in areas like Tin Shui Wai, Yuen Long, and Tuen Mun could offset this.

• Policy Address 2022: The government's push for "re-industrialization" includes:

  • Accelerating the construction of a second Advanced Manufacturing Centre at Tai Po Inno Park
  • Completing the Hong Kong-Shenzhen Innovation and Technology Park
  • Developing San Tin Technopole

These developments are expected to lead to the redevelopment of traditional industrial zones and the transformation of old industrial buildings into advanced manufacturing sites.

Key Industrial Land Sales

• KCTL 531 (Kwai Chung):
  • Sale Award Date: 20 July 2022
  • Type: Logistics Services & Public Vehicle Park
  • Site Area: 594,652 sq ft
  • Premium: HK$5,257 million
  • Accommodation Value: HK$3,539 per sq ft
  • Max GFA: 1,485,418 sq ft
  • Special Conditions: Building must be completed by 30 June 2028; total useable floor area of ancillary office shall not exceed 30%; includes a public vehicle park with 760 spaces.
  • Bidders: 3 bids received; unsuccessful bidders included Mapletree Investments (Singapore) and Goodman Group (Australia)

Vacancy Rates of Major Industrial Landlords (Q3 2022)

Key Information

• The industrial leasing market is showing resilience despite new supply entering the market.
• The government's re-industrialization policies are expected to have a long-term positive impact on the sector.
• The market response to KCTL 531 was encouraging, indicating strong demand for logistics land.
• The vacancy rates for major industrial landlords are generally low, suggesting strong occupancy and demand in the sector.

Contact Information

• Research: Martin Wong, Director, Head of Research & Consultancy, Greater China
  +852 2846 7184 | martin.wong@hk.knightfrank.com

• Industrial Services: Nathan Chan, Director, Head of Industrial Services
  +852 2846 4859 | nathanmt.chan@hk.knightfrank.com

• Commercial Agency:

  • Paul Hart, Managing Director, Greater China, Head of Commercial
    +852 2846 9537 | paul.hart@hk.knightfrank.com
  • Wendy Lau, Executive Director, Head of Hong Kong Office Strategy & Solutions
    +852 2846 4988 | wendy.lau@hk.knightfrank.com
  • Steve Ng, Senior Director, Head of Kowloon Office Strategy & Solutions
    +852 2846 0688 | steve.ng@hk.knightfrank.com

• Residential Agency: Maggie Lee, Senior Director, Head of Residential Agency
  +852 2846 9550 | maggie.lee@hk.knightfrank.com

• Retail Services: Helen Mak, Senior Director, Head of Retail Services
  +852 2846 9543 | helen mak@hk.knightfrank.com

• Valuation & Advisory: Cyrus Fong, Senior Director, Head of Professional Services
  +852 2846 7135 | cyrus.fong@hk.knightfrank.com

Disclaimer

This document is general information only and is subject to change without notice. All images are for illustration purposes only. Knight Frank will not be liable for any losses or damages arising from the use of this information. The material is confidential and intended solely for the evaluation of the document. No part of this material may be used without prior written consent from Knight Frank.