Visible trade to gain steam up to the next 18 months

12.7% growth in 2015 highly likely.

Hong Kong’s visible trade is expected to steadily gather momentum over the next6–18 months – growing by 4.7% in 2014 and 12.7% in 2015.

According to a research report from JLL, the pick-up in external freight volumes should help offset any slowdown in demand from the local retail sector.

Coupled with the absence of new supply, vacancy rates are likely to remain at low levels over the short term, supporting current rental levels.

Here’s more from JLL:

In view of the stronger-than-expected growth through 1H14, we have revised our full-year rental forecast up to a range of 5–10%.

The change in interest rate expectations – most economists now expect rates to rise gradually and over a longer period of time – is likely to encourage more investors back into the market, especially owner-occupiers; something that we did not anticipate earlier in the year.

With investor sentiment rising, warehouse market yields may potentially compress further given the positive spread over other industrial asset classes.