Investment in Hong Kong’s industrial buildings falls by half as protests, US-China trade war dampen sentiment
- Investment in Hong Kong’s warehouses, logistics and data centres plunged 52 per cent to US$719.9 million in the third quarter as civil unrest worsened
- The segment still remained resilient owing to tight supply and steady demand in Hong Kong, with warehouse vacancy at 1.7 per cent, the lowest in five years
Investment in Hong Kong’s logistics and industrial property declined by more than half in the third quarter of the year, as a period of worsening social unrest crimped domestic consumption and dampened sentiment.
Data from Real Capital Analytics, which tracks deals worth at least US$10 million, show that investment in industrial buildings came to US$719.9 million, down by 51.6 per cent from the roughly US$1.5 billion invested in the segment in the same period of 2018.
Industrial properties include warehouses, cold storage facilities, data centres and logistics centres.
In the first 11 months of the year, investment in the segment amounted to US$2.7 billion, making it unlikely to match the US$5.95 billion it received in the whole of 2018.
“The industrial investment market cooled down due to both internal and external shocks to investment sentiment,” said Samuel Lai, senior director, advisory and transaction services – industrial at CBRE Hong Kong.
Hong Kong officially tipped into a recession in the third quarter of the year with the economy shrinking 3.2 per cent from the previous quarter as it struggled under the double whammy of the US-China trade war and massive anti-government protests.