Blackstone, SilkRoad turn Hong Kong’s industrial property into a hotspot with 54 per cent jump in investment

Name: Hong Kong opens new toll-free tunnel linking the New Territories and Lantau Island
Uploaded: 2021-12-07T02:30:11.000Z
Duration: 1 min 19 s
Description: Hong Kong opens new toll-free tunnel linking the New Territories and Lantau Island

Global real estate funds accounted HK$17.3 billion or 61 per cent of industrial property transactions so far this year, up from 21 per cent share in all of 2020

Hong Kong’s industry revitalisation programme could boost supply and test market resolve on investment returns over the next two years

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CR Logistics acquired the East Asia Industrial Building in Tuen Mun, New Territories last quarter. Photo: Google Map

Sandy Li

Published: 10:30am, 7 Dec 2021

Global institutional funds have stepped up their purchases of industrial property in Hong Kong this year by 54 per cent, as Covid-19 continues to support bullish demand for data-centre and cold-storage facilities.

They spent HK$17.3 billion (US$2.2 billion) or 61 per cent of total transactions of such assets so far this year, according to CBRE based on deals valued above US$10 million threshold. The funds invested HK$11.2 billion or just over one-fifth of the total in all of 2020.

“New industrial-related businesses such as data centres, cold storage and self-storage are in keen demand, which encourages some value-add potential of old warehouse buildings,” said Reeves Yan, head of capital markets at CBRE Hong Kong.

Covid-19 cases have continued to spread as new and more infectious variants emerged, underpinning consumption patterns that fuel demand for logistics assets in the city. As a result, growing e-commerce has fuelled aggressive buying by global real-estate funds, industry consultants said.

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Hong Kong opens new toll-free tunnel linking the New Territories and Lantau Island

Among recent notable transactions, US private equity giant Blackstone acquired an industrial building named Elegance Printing Centre in Shau Kei Wan on Hong Kong Island for HK$500 million.

Industrial assets in Tuen Mun in New Territories have also become a key target for global funds with at least three major deals recorded in the third quarter.