Logistics market sentiment has remained buoyant with sustained demand and extremely low levels of availability. 

• Logistics demand has remained strong despite economic uncertainties, but leasing deals were rare in the second quarter with warehouse availability declining to extremely low levels.
• Overall and modern warehouse rents continued to rise by 1.9% and 2.7% in Q2/2022 respectively, while both overall and modern warehouse vacancy rates fell to 1.9% and 1.1% over the same quarter.
• The extremely low warehouse vacancy pushed some cash-rich operators into the sales market to secure operational space, while investors continued to hunt for high-yielding industrial assets.
• Looking ahead, while new supply may put some short-term pressure on rents, displacement demand from brownfield site resumption in the New Territories may provide some support in the near-term.
• While a potential increase in available warehouse space may slow owner-occupiers’ appetite to purchase in the short term, the high yields on offer mean industrial premises are still on top of the wish list of many yield-hungry investors.