WAREHOUSE STOCK1 BY CATEGORY AND DISTRIBUTION

Hong Kong’s warehouse stock has grown at a relatively low CAGR of 0.5% over the past 20 years. This is largely due to severe land constraints, resulting in a limited supply of sites for warehouse use.

Modern warehouse stock2 accounted for 51% of total warehouse stock (43.3 million sq ft IFA) at the end of Q3/2023, 2% of which (1.0 million sq ft IFA) is situated at Hong Kong’s International Airport (HKIA) at Chek Lap Kok. Modern warehouses have been developed over recent years and are managed by a few experienced developers and investors, including Goodman, Hutchison, Mapletree, China Merchants and Kerry.

There are 16 modern warehouses in Hong Kong with a total gross floor area of around 33.1 million sq ft gross, with the largest cluster in the Kwai Tsing / Tsuen Wan area close to both the cargo terminals and HKIA. The stock distribution of warehouses overall shows a clear shift of warehouse facilities towards the northwest New Territories over the past two decades.

WAREHOUSE SUPPLY, TAKE-UP AND VACANCY

Looking at the overall warehouse market, new supply of warehouse space has rebounded over the past decade. While average annual supply over the period from 2006 to 2010  was 69,000 sq ft IFA, from 2011 to 2020, average annual supply increased to 469,000 sq ft IFA. 2019 saw no new supply completed. From 2011 to 2019, eight warehouse projects were completed in Kwai Tsing, Yuen Long and Fanling, five of which (China Merchants Logistics Centre, China Resources International Logistics Centre, Goodman Interlink, SF Centre and Mapletree Logistics Hub Tsing Yi in Kwai Tsing) are built to modern warehouse standards. There was no new warehouse supply in either 2020 or 2021.