Hong Kong Northern Metropolis Displaces Tenants, Lifts Industrial Property Demand
Hong Kong's Northern Metropolis development forces brownfield businesses to relocate. This drives demand for industrial floor space, supporting rental prices across the city.
Metropolis Project Drives Industrial Relocation
Hong Kong’s Northern Metropolis project is prompting a significant relocation of brownfield tenants. These sites, primarily in the New Territories, historically offered affordable space for diverse businesses. This included storage depots, recycling centres, and scrapyards. The massive development now requires many of these operations to move. This displacement directly boosts demand for industrial floor space across the city, according to analysts.
Rising Demand Supports Rental Prices
Relocations have already accounted for nearly 20 per cent of new industrial property leases this year. This substantial uplift helps to slow the decline in rental prices for the sector. Samuel Lai, head of CBRE Hong Kong’s industrial and logistics division, revealed these figures.
He stated that 994 hectares of brownfield land are designated for acquisition for the Northern Metropolis. The first phase, from 2024 through 2026, covers about 320 hectares. Over 100 hectares of this land have already been acquired. Nearly half of the affected businesses operate in logistics and warehousing.
Sustained Pressure on Industrial Space
Most displaced brownfield operations will seek other brownfield sites. However, some are moving into urban industrial buildings and compliant logistics warehouses. This shift maintains pressure on existing industrial stock. It will likely continue to support rental values in Hong Kong’s industrial property market.
Companies needing affordable logistics space face sustained competition for compliant premises. This dynamic suggests continued support for industrial property rents in the near term.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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