E-retail logistics operators grab up to 100,000 sq ft in warehouses

The slow market didn't hinder their expansion plans.

It has been noted that while the leasing market in Hong Kong's industrial sector was generally quiet, with traditional logistics demand dwindling, two emerging demand trends were noted.

According to a research note from Savills, e-commerce-related logistics companies were active, expanding their businesses and thus floor space requirements, and Savills noted some significant expansion (in the order of 20,000 to 30,000 sq ft per company) in high grade warehouses in Tsuen Wan, Tsing Yi and Tuen Mun.

Further, after expansion, many of these e-retailing logistics operators could occupy up to 80,000 to 100,000 sq ft.

The report said that another demand source came from car dealers, who were actively looking at ground floor industrial space as their car showrooms; their area of focus was concentrated in Kowloon East.

Here's more from Savills:

With retail sales slowing, related logistics demand also slowed in the last quarter of 2014, with little leasing movement.

One of the most significant deals was the en bloc leasing of 11 On Chuen Street, Fanling (130,000 sq ft) to a logistics company (who provide exclusive services to AEON) for around HK$8.5 per sq ft (exclusive), who had just sold their Wilson Logistics Centre in Kwai Chung to a local investor for HK$633.8 million.

Another two fl oors at Wyler Centre I in Kwai Chung (64,000 sq ft) have already been pre-leased by two local logistics operators for HK$11 to K$11.5 per sq ft.