INDUSTRIAL DEALS PREVAIL IN A WEAK ECONOMIC ENVIRONMENT

The city continued to struggle against a confluence of downside risks including a slowing domestic economy, stringent border policies, rising interest rates and an uncertain macro-outlook. Total imports and exports of goods and services are expected to drop by 9.9% YoY and 10.3% YoY respectively due to restrictions on crossborder activity with mainland China and the deterioration in demand from the rest of the world. All in all, Real GDP growth is poised to retreat by 3.2% YoY for the full year of 2022, making Hong Kong one of the very few major markets slipping into recession within the Asia Pacific this year.

CASH-RICH LOGISTICS OPERATORS SNAP UP EN-BLOC DEALS

With a vacancy rate below 5% over the past 10 years, the industrial leasing market has weathered the storms which have beset other sectors with uninterrupted growth. E-commerce and 3PL operators have remained the dominant driving force, lifting modern warehouse rents by 3.1% YoY over the first three quarters of 2022, after 6.5% YoY growth in 2021.