More retailers outsource warehousing to 3PLs and reduce in house storage space

• Hitachi, the Japanese home appliances retailer, vacated around 50,000 sq ft in Ever Gain Centre in Shatin, subsequent to its outsourcing of logistics and maintenance service to Kerry Logistics.
• H&M, the fashion retailer, adopted the same warehouse outsourcing strategy, reportedly vacating around 100,000 sq ft in ATL Logistics Centre in Kwai Chung.

Prime warehouse vacancy rates reach new record high

• The overall vacancy rate rose to 10.1% in Q4 2025, from 9.3% in Q3 2025.
• There was no completion in Q4 2025.

Two enbloc warehouse transactions confirmed amid subdued sentiment

• The founder of dried seafood retailer HKJEBN bought the entire Big Orange in Tai Wai for HKD 500.0 million (HKD 2,924 per sq ft). As most floors are tenant‑occupied, the buyer plans to hold the asset for investment at present, with an estimated yield of 4.5% to 4.9%.
• G2000 Warehouse Building in Fanling was sold to Mainland Chinese investor for HKD 380.0 million (HKD 3,075 per sq ft) after the fashion retailer G2000 outsourced its storage division.

Outlook: Storage leasing market will remain challenging

• The trend of retailers outsourcing their in-house storage operations to third-party logistics providers is expected to persist in 2026, as retailers remain cost-conscious ahead of a more meaningful retail market recovery.
• External trade growth will have limited impact on storage demand due to the short dwell times of re-exports and the high efficiency of Hong Kong’s logistics operations.