Overall China logistics market leasing demand remained stable in H1 2023. By category, the manufacturing and consumer sectors were key contributors to leasing take-up in the period.
As regular economic and social activities in China resumed, a range of policies and measures to promote consumption have spurred a gradual release of pent-up consumer demand. This relatively faster recovery in consumption has in turn enabled a greater boost to overall economic growth. E-commerce and third-party logistics enterprises remain the primary tenants within the premium warehouse market.
- The total stock of premium logistics warehouse space in mainland China reached 114 million sq m in H1 2023
- Approximately 5.02 million sq m of new supply entered the mainland logistics market in H1
- The overall vacancy rate increased 1.4 percentage points from Q4 2022 to record 16.5%
- Overall average rents rose 0.8% from Q4 2022 to RMB33.8 per sq m per month
- Ahead, an additional 37.98 million sq m of new supply is scheduled for completion by the end of 2025
Hong Kong China
- Hong Kong’s total stock of premium logistics space remained at 31.2 million sq ft (2.90 million sq m) in H1
- No new supply was recorded in H1, although a mega-project totaling 4.1 million sq ft (0.38 million sq m) near to Hong Kong International Airport is expected to enter the market in H2 2023
- A new warehouse project, jointly developed by ESR and Chinachem, is due to be completed in Kwai Chung in the New Territories by 2027, spanning 1.5 million sq ft (0.14 million sq m)
- The overall market vacancy rate remained stable at 3.4%, while average monthly rents edged up 0.5% in H1 2023 to record HK$14.4 per sq ft
- Total premium logistics stock in Taiwan expanded to approximately 989,000 pings (3.27 million sq m) in H1
- Incoming supply is expected to add 186,000 pings (615,000 sq m) of stock by the close of 2025, an increase of approximately 18.8%
- Around 78% of current stock is concentrated in Taoyuan City, close to Taoyuan International Airport
- The average monthly rental level remained at approximately NT$650–750 per ping
The expansion of new projects has led to some vacant space in the premium logistics market, bringing renewed leasing pressure. Ahead, we expect the government and landlords to favor tenants with higher business efficiency and production volume.
With the change in consumers' consumption preferences and, subsequently, the demand structure, the development of the semi-prepared food market will further promote expansion in the cold chain logistics and storage market. The development of comprehensive cold chain parks, integrating production, storage, display, and sales functions, will become an emerging market trend.