Hong Kong Industrial Sales & Leasing - September 2025

Hong Kong’s Industrial Property Market Shows Early Signs of Recovery, but Challenges Remain

• Trade Data Rebounds, Leasing Demand Lags Behind: Temporary tariff reduction between China and the U.S. led to a year-on-year increase of 15.1% in exports and 14.0% in imports, with air freight volume rising slightly by 0.7%. However, container throughput dropped sharply by 8.2%, and overall warehouse leasing demand remained weak, with vacancy rates rising to 8.9% and rents declining by approximately 1.5%.
• E-commerce Logistics Shift Brings Both Challenges and Opportunities: The U.S. cancellation of the “de minimis” import tax exemption has prompted Chinese e-commerce giants like Temu and Shein to shift shipments to Europe and Asia-Pacific. While this poses near-term hurdle for Hong Kong’s logistic, it may create new growth opportunities in the medium to long term.
• Investment Sentiment Improves, Major Deals Stand Out: A notable drop in HIBOR has boosted investment activity. Key transactions include the sale of four industrial assets on Tsing Yi’s Tsing Tim Street for HK$750 million, and the sale of iTech Tower 3.1 and 3.2 — two data centres in Fanling — by Grand Ming to Bain Capital for HK$2.1 billion.
• Supply of High-Spec Logistics Facilities Increases, Competition Intensifies: New developments by ESR and Mapletree, scheduled for completion between 2027 and 2028, are expected to heighten competition for large-scale tenants. This may exert prolonged downward pressure on rents and vacancy rates.
• Market Outlook Remains Uncertain, Transformation Is Key: In the short term, transaction volume and capital values remain under pressure. A stable recovery will depend on clearer global trade policies and a diversified market strategy.