Industrial real estate market turns cautious amidst global uncertainty

New demand came from metal storage.

Hong Kong's commercial property industrial sector’s leasing volume stayed slow for a second consecutive quarter amidst global uncertainty in Q2, said CBRE’s report.

A total of 1.18 million sq. ft. of registered land was recorded for H1 2025, the lowest half-year result since H1 2015.

Weakened demand was caused by less aggressive logistics operators and traders amidst the global trade market outlook uncertainty.

Current leasing activity for industrial land was primarily driven by relocations.

Warehouse vacancy increased by 0.4 percentage point QoQ to 10.3%, causing rents to decline for the sixth consecutive quarter of 0.8% QoQ.

Notable leasing transactions include 92,000 sq. ft. in China Merchants Logistics Centre in Tsing Yi, partly for the storage of metals for the London Metal Exchange.

“Hong Kong was approved as a delivery point for the London Metal Exchange, we will see an increasing demand for warehouses to store metal,” said Samuel Lai, Executive Director of CBRE Hong Kong.