Hong Kong Warehouse Rents Seen Falling Further in 2027
CBRE expects warehouse rents to decline 1% to 3% next year as relocation space returns to the market.
Updated on Nov. 13, 2026 in Commercial
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CBRE expects Hong Kong warehouse rents to fall 1% to 3% in 2027, after declining about 20% to 25% from their peak. The pace of decline is slowing as landlords accommodate cost-sensitive tenants to reduce vacancy.
Why it matters
Rents remain under pressure as around 30 million square feet of forced-relocation space returns to the leasing market over five years, keeping supply elevated. Demand from third-party logistics, electronics firms and AI infrastructure continues to shape the market.
Hong Kong warehouse rents have fallen a cumulative 19% from the 2023 peak, with industrial vacancy easing to 9.9%. CBRE's forecast of a further 1% to 3% decline in 2027 depends on how quickly relocation space returns to the market.
The players
CBRE
CBRE is a global commercial real estate services firm that publishes market forecasts and leasing research across Asia-Pacific and other regions.
The details
Cost-sensitive users from the north are moving from temporary warehouses back to the city, while companies are holding more inventory in Hong Kong. More landlords are also supporting warehouse automation to attract tenants.
Timeline
- 2023: Warehouse rents peaked before the cumulative correction began.
- 2026: Cost-conscious northern users drove transactions this year.
- 2027: Warehouse rents are forecast to fall 1% to 3%.
- Over the next five years: About 30 million square feet of relocation space returns to the market.
Industry Dynamics
The warehouse rent decline sits alongside the Northern Metropolis development, which is driving relocation of logistics users from temporary sites back into the city. Demand from AI infrastructure and data centres is a newer factor reshaping industrial space needs in Hong Kong.
Businesses leasing warehouse space in Hong Kong may have room to negotiate as rents drift lower through 2027. Tenants weighing a move from temporary sites should factor in the continued return of relocation space over the next five years.
The takeaway
Warehouse tenants in Hong Kong may find more leverage in the coming years as landlords compete for cost-sensitive users. Monitoring vacancy and relocation timelines can help businesses time lease decisions.
Further reading
For broader context on how office and industrial space is trading, see the Commercial section.
Source note: This article includes information reported by Hong Kong Business.
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