Outsourcing trend by companies underlined demand for warehousing space in Q2

This caused vacancy rates to remain low.

The on-going trend by companies to outsource more of their supply chain to 3PLs along with improvements in the external trading environment underlined demand for warehousing space in 2Q14.

According to the quarterly summary on the Hong Kong property market (2Q14) by JLL Hong Kong, as a result, vacancy rates remained low despite rentals being at record high levels.

Meanwhile, the report also noted that demand for warehousing space near the Kwai Chung container port remained strong; especially for properties with floor plates over 40,000 sq ft and monthly rentals below HKD 10 per sq ft.

Here's more from JLL Hong Kong:

Led by a pick-up in trade with advanced economies and the Mainland, the total value of exports and imports grew by 1.7% y-o-y and 3.1% y-o-y, respectively, in April-May; a slight improvement on the growth recorded in 1Q14.

Japanese 3PL operator, Konoike Transport leased 58,500 sq ft in Gateway ts, Ungert Line leased an additional 25,900 sq ft in Tai Hing Industrial Building and OM Log (Asia) expanded a further 53,000 sq ft in Western Plaza.

Bonjour acquired the whole of Harrington Building in Tsuen Wan for HKD 490 million (HKD 2,189 per sq ft). The local cosmetics retailer plans to self-occupy and hold the property for long-term investment.

According to local press, logistics property fund Goodman, is reportedly negotiating the purchase of Central Textiles – a group of five low rise industrial buildings – in Tsuen Wan for about HKD 1 billion. The existing buildings will likely be redeveloped.