Hong Kong's economy has been hit hard by the US-China trade war, but global real estate firm JLL says the industrial property sector remains a bright spot. In May, industrial property demand remained basically steady, driven by the expansion requirements of logistics companies. There were numerous large-scale trades documented. Geodis, a leasing company, expanded over the full 19th floor of the YKK Building Phase 2 in Tuen Mun (34,100 sq ft). As for the 822 Lai Chi Kok Road industrial building in Cheung Sha Wan, it was purchased by Laws Property Group, which wants to turn it into an industrial, retail, and commercial property for HKD1.4 billion (HKD14,870 per sq ft). According to these recent deals, the industry looks to be profiting from the government's aim to restore outdated industrial facilities. used cars for sale
Investors continue to be driven to the market by the development potential of older industrial assets that are suited for revival, says JLL's Head of Research, Denis Ma. Areas with a considerable housing supply and those undergoing gentrification are of particular concern. This is one of the primary reasons why we expect industrial asset values to rise by 5% "by the year 2019."
The office leasing market experienced net absorption of 1.47 million square feet in May. Large portions of the rise can be attributed to the realization of pre-commitments in newly constructed structures. Except for the impact of additional production, net absorption was 196.400 square feet. However, despite the fact that tenants were looking for more affordable options, leasing activity remained focused in more rural locations. One of the more notable transactions involved FTLife Insurance, which reportedly leased 94,500 square feet at NEO in Kwun Tong after moving from Sheung Wan.
Tsimshatsui and Hong Kong East saw the most month-over-month increases in market rents in May, at 0.3 percent each. Rents rose by 1.4% month on month in Hong Kong East, where the vacancy rate had dropped to 1.5% by the end of May, the lowest of any district.
According to Alex Barnes, Head of Markets at JLL: "While vacancy rates have risen due to a recent decrease in leasing activity in Central, we continue to see active growth requirements from a smaller part of the financial and legal industries. As a result, landlords will only be under pressure to decrease rents in a few buildings where vacancies are more likely."