Tender sale of first logistics site in five years in Tuen Mun likely to fetch HK$2.56 billion
Aggressive bids likely by Chinese e-commerce companies and logistics firms
Chinese e-commerce and logistics companies are expected to submit aggressive bids for a large logistics site in Tuen Mun on Friday, the first the government has offered in the past five years through tender, according to industry professionals.
The 340,870 square feet plot on Siu Lang Shui Road opposite River Trade Terminal in Pillar Point, with a plot ratio of 2.5 times, is expected to yield a total gross floor area of 852,000 sq ft for a five-storey logistics centre.
The land could receive bids of as much as HK$2.56 billion (US$326.3 million) or about HK$3,000 per sq ft of gross floor area, which is about 30 per cent above the average price of industrial buildings, as prices of such buildings have been trending upwards in recent years, said Vincent Cheung, deputy managing director for Asia valuation and advisory services at Colliers International.
Demand for warehouse and logistics facilities is rising on the back of the rebound in Hong Kong’s retail sales and the growth in e-commerce, according to Colliers.
“There is competition between traditional logistics firms and e-commerce companies,” said Cheung.
He said logistics firms want to keep their industry market share, while e-commerce companies want to take control of the logistics part to control costs, increase the price competitiveness of goods sold on their platform, and reinforce the buying experience of customers by enhancing their logistics service quality.