Overall logistics market demand was relatively active in Q2 2024, although the number of new projects entering the market increased compared with Q1. Consequently, leasing pressure in the premium logistics warehouse market remained significant. In some city markets, the strategy of trading volume for price has shown initial effectiveness, with rents and vacancy rates both trending downwards.
In the investment market, transaction volume in the industrial property sector remained at 4% of total transaction volume in H1 2024. Although the share of total investment in Q2 2024 did not change, overall activity in the logistics investment market improved slightly compared with Q1 2024.
Chinese Mainland
- The total stock of premium logistics warehouse space on the Chinese mainland reached 120 million sq m in Q2 2024.
- Approximately 976,000 sq m of new supply entered the Chinese mainland logistics market in Q2.
- The overall vacancy rate rose 0.6 percentage points q-o-q to record 17.2%.
- Overall average rents fell 2.6% q-o-q to RMB31.6 per sq m per month.
- Ahead, an additional 32.67 million sq m of new supply is scheduled for completion by the end of 2026.
Hong Kong China
- Hong Kong’s total stock of premium logistics space remained at 35.3 million sq ft (3.27 million sq m) in Q2.
- Hong Kong prime warehouse rents remained largely stable in Q2 at HK$15.3 per sq ft per month. The overall warehouse vacancy rate moved down to 6.5% during the quarter, compared to 7.1% in Q1 2024
- Despite the near-term market uncertainties, the overall warehouse vacancy level is expected to remain stable, with no new warehouse supply currently scheduled until 2027.
Taiwan China
- Total premium logistics stock increased to approximately 1.10 million pings (3.62 million sq m).
- Incoming supply is expected to add 191,900 pings (634,300 sq m) of stock by the close of 2026, an increase of approximately 17.5%.
- Around 72% of stock is concentrated in Taoyuan City, close to Taoyuan International Airport. The average monthly rental level increased to approximately NT$700-NT$800 per ping.
Outlook
The premium logistics warehouse market is facing challenges such as new supply and intense competition. However, with the recovery of demand for warehouse space leasing brought by continued industrial upgrading and transformation, we expect the new supply to be effectively leased. In turn, rental levels and vacancy rates in the high-standard warehouse market will gradually stabilize. The industry is expected to achieve healthier and more sustainable development in the future.
