Hong Kong logistics rental softens in H1

Tenants’ adjustment and tariff risks dragged rental prices and activities.

Logistics rental growth dropped by 3.9% year on year in the first half of the year, as tenants adjust supply chain strategies and explore relocation or dual logistics to reduce cross-border tariff risks, said Knight Frank’s report.

Prime rent recorded $14.9 per sq. ft. per month over the same period and is expected to drop in the next 12 months as a substantial pipeline of over 2.5 million sq. ft. is scheduled for completion by 2027.

Vacancy rate in Q2 2025 continues surging to 10.3%, a record high in five years.

Markets are leaning towards tenant-friendly conditions as leasing activity slowed and rents declined.