CBRE Group's latest research report points out that geopolitical challenges continue to impact Hong Kong's cross-border retail and corporate data center plans, and the slowdown in the mainland economy has also reduced the activity of mainland tenants. The report also shows that the recent data center supply exceeds demand, leading to an increase in vacancy rates. Although mainland and international large-scale enterprises dominate the majority of absorption, Hong Kong's information technology service providers have also driven absorption in the Asia-Pacific region. The supply tide is expected to continue until mid-2025 and then gradually slow down, achieving a more balanced supply and demand situation in the long-term.
Lai Shangwen, Executive Director and Head of Industrial and Logistics Department of CBRE Group's Hong Kong Advisory and Transaction Services, said that in the past year, large-scale cross-border and mainland ultra-large-scale enterprises have conducted bulk transactions by taking advantage of high vacancy rates. Despite facing various macroeconomic challenges, Hong Kong continues to attract data center tenants with new supplies, competitive prices, strong economy and network infrastructure, as well as its strategic position as a regional business center adjacent to the mainland. Given limited new land and power supply, developers and operators may consider transforming existing factories for market use after 2026.