Hong Kong faces risk of oversupply in HSK logistics pipeline: CBRE

CBRE flagged the risk of excess logistics and industrial space, particularly the planned 45 million sq ft allocation in HSK/HT.

As Hong Kong pushes forward with mega infrastructure projects in the Northern Metropolis, CBRE called for more strategic land use planning to prevent oversupply and boost investor confidence, especially in areas like Hung Shui Kiu/Ha Tsuen (HSK/HT) and San Tin Technopole.

CBRE flagged the risk of excess logistics and industrial space, particularly the planned 45 million sq. ft. allocation in HSK/HT, which exceeds the city's current private storage stock.

The advisory recommends a phased and market-responsive rollout of these sites to prevent vacancy and underutilisation.

“There is already a large area zoned for innovation and technology at San Tin. It may not be necessary to duplicate the same uses at HSK/HT,” CBRE’s advisory stated​.

The report also urged the government to re-examine the public-private housing ratio at San Tin Technopole—currently set at 50:50 to 70:30—to better attract talent.

“If these professionals cannot find suitable housing in San Tin, they may choose to live in Shenzhen instead,” CBRE warned​.

On the infrastructure front, CBRE praised the city’s investment of $110b in railway expansion by 2031, but warned that funding gaps remain a major obstacle.

“Hong Kong’s transformative infrastructure developments are set to reshape the city into a more connected and competitive urban landscape,” said Hannah Jeong, Executive Director, Valuation & Advisory Services, CBRE Hong Kong. “But it is crucial for the Government to address the funding gap for immediate infrastructure development”​.

To encourage early-stage private sector involvement in residential projects above new rail stations, Jeong suggested the government “offer nominal premiums to the railway operator” as part of a broader rethink of the “Rail plus Property” model.

Chester Leung, Senior Director, Valuation & Advisory Services, added that more flexible tender terms, including rolling evaluations and extended payment schedules, could improve the feasibility of multi-storey industrial building projects aimed at relocating brownfield operators​.

CBRE’s recommendations come as the government prepares to tender multiple pilot land parcels across HSK/HT, San Tin, and Fanling North.

However, the firm warns that fragmented land plots and high land premiums could deter developer interest unless the planning process is revised to offer greater flexibility and integrated master plans.