Chicago-based Heitman joins global funds to tap Hong Kong’s growing demand for cold-storage facilities
- Heitman plans to convert a 100,000 sq ft industrial building in Fanling into a cold-storage facility within the next 12 months
- Global investment funds have spent HK$2.3 billion to acquire three cold-storage assets in Hong Kong over the past year
Global real estate funds are tapping growing demand for cold-storage facilities in Hong Kong as the tough social distancing rules and work from home arrangements amid the pandemic accelerates online sales of groceries.
Chicago-headquartered Heitman, with over US$50 billion in assets under management, is the latest entrant into the sector, acquiring a 100,000 sq ft industrial building in Fanling for an undisclosed price.
The fund will commence a fit-out of the property to repurpose the asset into a cold-storage facility.
“We expect demand for specialised en-bloc facilities to continue to grow on the back of close to full occupancy of cold-storage space currently across Hong Kong,” said Brad Fu, head of Asia-Pacific acquisitions at Heitman, which has been investing in Hong Kong’s traditional industrial and office properties since it set up an office here in 2012.
The facility is 100 per cent pre-let to end users even before the completion of the renovation work, which is likely to take around 12 months, Fu said. He added that the tenants include high-end fresh and frozen food operators, but declined to name them.
“Demand growth for cold-storage space has remained resilient as the online sale of groceries in the city has multiplied in recent years, while consumption of fresh and frozen foods has also continued to increase,” said Fu.