Industrial leasing stable with renewals amidst PMI dip

Leasing renewals and site relocations to drive future market growth.

Despite the industrial market's moderation in Q2 and the PMI falling below 50.0, leasing activity held steady.

Colliers observed that renewals from most tenants, especially third-party logistics (3PLs) companies, were the main drivers of leasing activity.

Notable transactions include YesAsia’s expansion to Mapletree Logistics Hub Tsing Yi from the autonomous mobile robotics (AMR) fulfilment centre in Goodman Interlink.

Colliers noted that labour shortages are prompting occupiers to upgrade from tin-shed facilities to more efficient and conveniently located purpose-built warehouses.

The improved Hong Kong and GBA link leads operators to relocate slow-moving stock across the border for lower costs.

Colliers foresees a further tightening of North District supply as brownfield redevelopment resumes in the Northern Metropolis. Relocation needs will primarily drive new leasing activity.