Brownfield Exodus Eases Pressure on Hong Kong Industrial Property Market
SCMP · 1 SOURCESabout 1 hour ago2 MIN
Summary
For years, brownfield sites across Hong Kong's New Territories have served as affordable hubs for a diverse range of businesses, from storage depots and recycling centres to scrapyards and sawmills. Now, the ambitious Northern Metropolis development project is disrupting these operations, forcing tenants to relocate and inadvertently providing a lifeline to the city's struggling industrial property market.
The wave of relocations has driven nearly 20 percent of new leases for industrial properties recorded so far this year, a substantial uplift that has helped slow the decline in rental prices across the sector, according to property analysts .
Key Points
- Samuel Lai, head of CBRE Hong Kong's industrial and logistics division, revealed that 994 hectares of brownfield land is set to be acquired for the Northern Metropolis project across four phases
- The first phase, spanning from 2024 to the end of 2026, covers approximately 320 hectares of land, with more than 100 hectares already acquired
- Nearly half of the businesses operating on the brownfield sites were in logistics and warehousing sectors, with other facilities including car parks, sawmills, storage depots, recycling centres and scrapyards
- Industrial properties in Fanling have benefited the most, offering proximity to Northern Metropolis brownfield sites and rental rates acceptable to displaced operators
- According to CBRE data, a total of 2.3 million square feet of space in industrial buildings and warehouses has been leased in Hong Kong year-to-date, with more than 400,000 square feet involving storage businesses relocating from brownfield sites
Why It Matters
While most displaced brownfield operations relocate to other brownfield sites to continue business, some are forced into urban industrial buildings and compliant logistics warehouses, creating a ripple effect across the city's property landscape . The Northern Metropolis development, designed to transform Hong Kong's northern region into a strategic growth corridor, is reshaping the industrial property market in unexpected ways, potentially altering the competitive dynamics between traditional brownfield operators and mainstream industrial landlords for years to come.
While most displaced brownfield operations relocate to other brownfield sites to continue business, some are forced into urban industrial buildings and compliant logistics warehouses, creating a ripple effect across the city's property landscape . The Northern Metropolis development, designed to transform Hong Kong's northern region into a strategic growth corridor, is reshaping the industrial property market in unexpected ways, potentially altering the competitive dynamics between traditional brownfield operators and mainstream industrial landlords for years to come.