Third-party logistics players ramp up expansion plans despite trade jitters

ATC Air Service and AK Logistics grew their Kwai Chung footholds in July.

Hong Kong’s industrial property market remained undeterred by increasing strain between the US and China as third-party logistics providers (3PLs) ramped up their expansion plans in July, according to real estate consultant JLL. 

ATC Air Service expanded in-house by 21,000 sqft at ATL Logistics Centre in Kwai Chung whilst AK Logistics relocated from MTL Warehouse Building to Hutchison Logistics Centre. 

New lettings in the industrial sector include A.S. Watson Retail (HK) leasing 27,400 sqft at Hutchison Logistics Centre along with East Union International Logistics leasing 23,500 sqft at Ever Gain Centre in Shatin. The 15-storey industrial buliding in Tai Kok Tsui, Hing Yip Centre, was also bought by Sky Creation (Asia) for $99m or $4,714 psf.

Also read: Tech logistics boosts industrial property sector in H1 2018

“In the warehouse sector, which is likely to be most affected by the trade war, demand remains firm with a number of 3PLs expanding their operations in July. All-in-all, we believe that Hong Kong’s property market will likely stand tall this year though growth may ease slightly in the second half,” Denis Ma, head of research at JL said in a statement.

Nonetheless, escalating trade tensions could easily slash commercial and industrial property deals in Hong Kong by 12% in the second half of the year.

The number of transactions for industrial and commercial properties hit 5,290 in H1 2018, according to real estate agency Ricaport Properties but the growing shadow of the trade war could push down deals to 4,680 with those  involving mid-range industrial building units worth between $10m and $100m at largest risk from weakened investor sentiment.