Here's why warehouse rents in Hong Kong are unstoppably rocketing

No thanks to a vast, new marketable space.

Preliminary figures have noticed that in Hong Kong's industrial market, warehouse rents keep on rising.

According to a release from CBRE, overall rents stayed on an uptrend supported by the stable external trade and the organic growth from tenants for prime warehouse.

Relocation was also active amid ongoing building revitalization that forced tenants to move.

Further, overall market vacancy rate for warehouses was lifted to 2.6% (up by 2.1 percentage points from Q3), mainly attributed to the new supply from SF Centre, bringing a circa of 653,000 sq. ft. marketable space.

Here's more from CBRE:

Office Market - Leasing Remains Relatively Active in Central: Office leasing market relatively active in Central with several asset management tenants expanding or looking to expand in Q4 2014.

Net absorption in the overall market with NFA of 83,000 sq. ft., bringing the full year figure to a positive 453,000 sq. ft., in contrast to the negative 392,000 sq. ft. in 2013.

Overall vacancy rate up by 0.3 percentage point to 3.6% in Q4 due to the addition of new Grade A office space in Tsuen Wan (The Octagon).

Overall rents was increased by 0.6% q-o-q, as rents both improved in Hong Kong Island and Kowloon side.

Investment Market - Active Industrial Transactions: Investment transactions slowed with total turnover amounting to HK$16b in Q4, bringing full year lump sum to HK$73b, down 10% compared to 2013.

En-bloc properties, especially those from industrial sector with revitalization potential, were the most sought after. Six out of the 12 en-bloc sales recorded were of industrial usage.

Retail Market – Retail Rents Edged Down: The “Occupy Central” protest mainly disrupted the retail business of street shops in Mong Kok and Causeway Bay in the early half of Q4. Overall sentiment seemed to have improved towards the year-end amid holiday season

Overall rents for prime streets shops remained largely stable during Q4 with a slight drop of 0.2% q-o-q. A few eye-catching leasing transactions were concluded in prime areas, mainly from watch and jewellery retailers.

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