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HONG KONG: Industrial property markets in the region finally stabilised after the global financial crisis as keen investment demand drives notable growth in capital values, according to Colliers International's latest Asia-Pacific Industrial Market Overview.
Despite a 17.7% quarter-on-quarter (q-o-q) drop in the number of strata-titled transactions to 1,442 during the period between December 2009 and February 2010, capital values of Hong Kong's prime, mid and low-quality factories registered a six-month increase of 9.4% to 14.1% as of March 2010.
“Most landlords held on tightly to their premises, hoping to enjoy further capital appreciation. Thus, the number of transactions dropped in the latest quarter,” said Wayal Chiu, director of industrial, Colliers International Hong Kong.
The growth in capital values of warehouses and factories recorded double-digit q-o-q as of March 2010.
Investors demand for whole-block premises is increasing, which Chiu attributed to the government’s introduction of new revitalisation measures to facilitate the redevelopment and conversion of industrial buildings.
"Prime premises in traditional core areas are expected to be the key beneficiaries,” added Chiu.
Demand for industrial properties is expected to stage further growth as more manufacturers are expected to expand their operations in the face of anticipated continued recovery in global trade and economic growth.
Colliers also expects land and capital values as well as rents to see a steady increase in the next 12 months for major industrial markets in the region.
According to the report, the top-five monthly gross rents of single-user warehouses in Asia Pacific as of March 2010 were all found in Tokyo’s markets, including Heiwajima, Shinsuna, Ariake, Higashi Ogishima and Daikokufuto.
Shang Di in Beijing led the gross rents of single-user factories at US$1.14 (RM3.79) psf per month in March 2010, the same as in October 2009. It was followed by Singapore-Central and prime quality factories in Hong Kong (values provided are for multi-user factory buildings), up 5% and 7% respectively, compared with September 2009.
Hong Kong was ranked the highest in Asia-Pacific for factory capital values, while single-user warehouses in Heiwajima, Tokyo, topped the region at US$267.5 psf, despite a six-month drop of 8.5%. The capital values of Hong Kong's prime, mid and low-quality factories also ranked 1st, 2nd and 3rd respectively, in the region.
The industrial land values in west, south and north of Delhi for single-user warehouses and factories were ranked within the top four in Asia-Pacific as of March 2010, same as the previous six months, said Colliers.
The biannual report covers 13 cities in nine countries, reviewing the industrial markets in the region over the period between October 2009 and March 2010.
