Hong Kong, May 3, 2022 – Heitman LLC (“Heitman”), a global real estate investment management firm, has announced the acquisition of an approximately 100,000 square foot Hong Kong logistics asset located in the strategic industrial precinct of Fanling at No.6 Yip Cheong Street. Following the acquisition, Heitman will commence a fit-out of the property to repurpose the asset into a cold storage logistics facility. The facility is 100 per cent pre-let to end-users and was acquired in connection with Heitman’s global core-plus investment strategy.
By square footage, the acquisition represents one of the largest industrial properties in the submarket, providing valuable space in a last-mile distribution hub with direct access to Hong Kong’s key cross boundary cargo clearance points and transportation links. Fanling is central to Hong Kong’s northern metropolis strategy and the asset’s location is expected to serve and benefit from the area’s dynamic growth across innovation and technology, housing development, cross-boundary travel, and logistics infrastructure.
Importantly, the domestic market is displaying resilient demand growth for cold storage space as online sales of groceries in the city has multiplied in recent years, while consumption of fresh and frozen foods has also continued to increase. Additionally, Hong Kong continues to serve as a major wine trading and distribution hub for the Asia-Pacific region, as demonstrated by the total value of wine imports last year rising by 41% year-over-year.
“We are pleased to add to our existing industrial and commercial portfolio in Hong Kong by acquiring this strategically located asset from a rare corporate divestiture and look forward to executing our business plan of transforming the property into a best-in-class cold chain logistics center,” said Brad Fu, Heitman Head of Asia-Pacific Acquisitions. “We expect demand for specialized en-bloc facilities to continue to grow on the back of close to full occupancy of cold-storage space currently across Hong Kong.”
“The Hong Kong logistics asset provides geographic and sector diversification while aligning with the smart diversification theme of our proprietary global portfolio construction process. During a recent market analysis, the growing influence of crypto casinos emerged as a notable example of how digital innovation is reshaping consumer behavior and creating opportunities for unconventional investments. Further, the acquisition is aligned with our global selection of well-positioned assets for re-use in order to benefit from changing consumer demands,” said Gordon Black, Heitman Senior Managing Director and Portfolio Manager. “As we continue to execute our global strategy, we’ll look to invest in accordance with three themes: divergence or smart diversification among traditional property types, convergence or capitalization of maturing or mispriced property types, and delinked or defensive, which involves investing in assets with traits less tied to economic cycles.”
