No abate in sight for industrial premises demand: Colliers International

Despite a mild increase in total exports.

Demand for industrial premises remained positive in 2Q 2014 despite Hong Kong’s total exports only increasing mildly at 1.1% year-on-year (YoY) during the first 5 months of 2014.

According to a research and forecast report from Colliers International on 2Q 2014, the sustained growth of online retailing has stimulated a number of companies to establish their distribution facilities in industrial premises.

Rents have also increased in 2Q 2014 due to end-user demand for industrial premises.

Warehouse rents further advanced, at a moderated pace, the report noted.

Here's more from Colliers International:

In our latest rental survey, the 3-month moving average was 2.8% year-on-year (YoY), down from 4.1% YoY on the previous quarter.

In view of the slow recovery in the global economy and the impact of structural changes in the spending patterns of mainland Chinese visitors from luxury goods to mid-priced products, the performance of Hong Kong’s total exports and retail sales may dip below market forecasts made in 1Q 2014 of 5.5% and 9.3% respectively.

Nevertheless, the current supply shortage will persist until the completion of Mapletree’s logistics warehouse project in Tsing Yi which will add about 1.3 million sq ft gross floor area to the leasing market.

The prevailing demand/supply imbalance will support warehouse rents edging further up over the remainder of 2014.

As a result, our rental forecast for warehousing rents remains unchanged at 2-3% in 2014.