Net supply of factory space expected to remain negative until 2017

Amid news of the revitalisation scheme's end.

The government has decided to discontinue the Industrial Revitalization Policy in March 2016, and this has led to an outlook involving supply challenges in the industrial sector.

According to a research note from CBRE, the shortage of supply will last until at least 2017, driving up overall industrial rents in the foreseeable future.

The end of the scheme may benefit user groups in search of industrial space for the purpose of self-storage, data centers, F&B operators and arts and culture.

Here's more from CBRE:

In the absence of government incentives or subsidies, owners of ageing industrial properties will be reluctant to invest in maintenance, but leasing demand for these buildings will remain steady given the lower rental level.

Marcos Chan, Head of Research, CBRE Hong Kong, Macau and Taiwan, said, “The end of the revitalization scheme will benefit the industrial sector, but this will come at the cost of other sectors as it will restrict new commercial property from this source.

In the absence of strong support and planning from the government, simply relying on development in the free market will be insufficient.

We would encourage the government to outline new plans to support the regeneration of old industrial stock, which would align well with initiatives to promote new industries identified by the government in its recent policy addresses.”