an uncertain economic environment, demand drivers and robust business activity
mean self-storage activity is growing.
was an estimated 3.4 million sq. ft. of self-storage demand in Hong Kong in
response to the demand, self-storage stock has increased greatly in Hong
Kong (+20%) to 3.1 million sq. ft. of rentable space.
this implies a shortfall of 200,000 sq. ft. of stock in Hong Kong in
2015 despite the strong increase in supply.
Benson, Executive Director,Industrial &
Logistics, Brokerage Services, CBRE Asia, commented, "The
self-storage market in Hong Kong remains fundamentally solid. The market is
driven by favorable demographic and economic trends, such as smaller
residential flats and low vacancy in the office sector, which is paired with
low saturation in terms of self-storage per household relative to other markets
the next few quarters, we expect self-storage to expand continuously but likely
at a slower rate, as the weak residential sales market and the uncertain macro
conditions have dimmed its short-term outlook. The industrial revitalization
scheme resulted in lower industrial stock, which may also create rental
pressure for operators.While
most operators are becoming more cautious with their expansion plans, bigger
operators are actively scanning for buying opportunities with an expectation
that more sales stock will come to the market as sellers exit to lock in
capital gains achieved over the past few years. In the long run, we generally
see a steadily increasing demand for self-storage in Hong Kong."
Dr.Henry Chin, Head of Research, Asia Pacific at CBRE, commented, "The
fundamental demand drivers for self-storage and business activity are
increasing, despite the uncertain economic environment. The manufacturing
sector is under pressure, dampening demand for industrial factories—the
underlying property for self-storage. This represents a potential market entry
and expansion opportunity for self-storage players. However, while we see
significant opportunities for growth there are also areas of caution around
this sector. There is a lack of awareness of self-storage in the region and the
shorter lease terms and land tenure in Asia, compared to other regions, also
present a challenge. Moreover,
there is a shortage of suitably located and priced properties but this is
beginning to ease. As a result, we may see players consolidating in order to
create scale in multiple markets."
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
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