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COMMERCIAL PROPERTY | Staff Reporter, Hong Kong
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Industrial property rebounds with 809 transactions in Q1

The majority of the transactions in Q1 were worth up to $10m.

The industrial property sector rebounded in the first quarter, as it started the year with a “dramatic” increase in sales volumes, Savills plc said.

Industrial sales volumes climbed to 809 in the first quarter, compared to only 576 in the previous quarter. Savills noted in its April report that nearly 85% of these, or 683 of the transactions, were priced at $10m or below.

This indicated that “stratified sales are still dominant with many small investors shifting their purchases from other asset classes (such as office and retail) to industrial,” the report read.

Moreover, flatted factory and I/O prices were stable whilst godown prices rose 1.8% during the quarter.

Meanwhile, the sector also recorded seven major industrial transactions, each worth more than $100m.

This represented a total consideration that surpassed the $2b mark, Savills plc said in its April report. Out of this, six were purchased for investment, whilst one was for redevelopment.

Savills attributed the recovery to the gradual containment of the COVID-19 outbreak locally and the recovery of economies in the region

This has benefitted the logistics sectors, driving operators to relocate and expand to cater to increasing demand.

“With logistics operators active in looking for relocation and expansion space again given reviving logistics demand, warehouse landlords are now cautiously optimistic and both rents in the overall and modern warehouse markets rose by 0.5% and 2.4% over the first quarter of the year as a result,” Savills said.

Warehouse overall vacancy also dropped to 3.1% in the first quarter from 4.1% in the previous quarter. Savills expects warehouse rents to increase by up to 5% during the year considering there will be no new warehouse supply in 2021.
 

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