Tech manufacturers drove higher levels of leasing activity this quarter.
Robust demand from tech manufacturers boosted industrial leasing activity in Q4 as warehouse rents rose 0.3% QoQ whilst factory rents edged 1.1% QoQ, according to CBRE.
Major transactions include a Singaporean gaming hardware manufacturer leasing 120,000 sq ftt in ATL Logistics Centre, Helu-Trans Group who leased 53,000 sq ft in two Kwai Chung warehouses and DCH Auriga who is set to conduct a phased consoliation of its 300,000 sq ft portfolio into a single warehouse.
Storage space remains highly sought after amidst strong consumption and trading activity in Hong Kong.
CBRE also notes that record-breaking e-commerce sales on online festivals like Black Friday, Thanksgiving and Double 11 Festival translated into solid demand for express delivery service.
This comes as global logistics company DHL Express announced that it would increase its Central Asia warehouse space by approximately 168,000 sq ft in the first quarter of 2022 to cater to rising intra-Asian trade.
Amidst higher industrial activity, warehouse vacancy dropped slightly to 5%.
CBRE notes that the improving outlook for global trade and gradually stabilising retail market is set to prop up further growth in warehouse demand for the year ahead.
Improving infrastructure links such as the Hong Kong-Zhuhai-Macau Bridge, the Express Rail Link and the Liantang-Heung Yuen Wai Boundary Control Point is also set to improve logistics and e-commerce activity in the region.
Leasing activity is projected to accelerate thanks to companies in e-commerce, technology-trades, high-value products and pharmaceuticals.
“Overall warehouse rents are forecast to register low single-digit gains, supported by rental growth in cargo-lift access premises. Rents in ramp-access premises will remain flat due to the presence of a sizable volume of vacant space in this segment of the market,” CBRE said in its report.
Photo from Axisadman - Own work, CC BY-SA 3.0
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