Yuen Long Logistics Site Sale: Hong Kong's Lands Department Sweetens Terms for Buyers

The Strategic Importance of the Yuen Long Logistics Site

The Lands Department of Hong Kong is set to enhance its logistics landscape by launching a second site in Yuen Long tailored for multi-storey logistics buildings. This strategic initiative aims to bolster the logistics industry while accommodating displaced operations.

Details on the New Site Sale

The 77,737-square metre (836,754 square feet) parcel located in Hung Shui Kiu and Ha Tsuen will be available for public tender starting October 18, closing on March 21. This deadline extension was implemented to assist potential investors, ensuring they can navigate both site proposals effectively.

1. The first site, measuring 32,440 square metres on Fuk Wang Street, aims to spark growth in logistics.
2. Feedback from market players led to adjustments in the tender requirements, enhancing financial appeal.
3. Winning bidders are now required to surrender only 20% of floor space to the government instead of 30%.
4. Plot ratio alterations will further reduce costs, now set at five from an original seven.

Market Scenarios and Investment Considerations

The new site in Hung Shui Kiu, nearly 2.4 times the size of the Fuk Wang Street site, is poised to attract significant interest from major logistics companies. Experts predict values could range from HK$400 to HK$1,000 per square foot, although the site is likely to command prices on the lower end of that spectrum.

Looking Ahead

With a current industrial property vacancy rate of about 8%, the new developments are vital in addressing long-term supply shortages in Hong Kong's competitive market. Major stakeholders are encouraged to present both premium and non-premium proposals, with a weighted consideration of 70% for non-premium developments.