Wednesday, 26 January 2011
The significant full-year leasing success was attributable to several existing large space occupiers including DHL (over 300,000 sq ft), Santa Fe (over 250,000 sq ft), JSI Logistics (over 90,000 sq ft) and Kyocera Mita (over 80,000 sq ft) agreeing to new terms to extend their leases beyond 2010. A number of other larger customers also renewed and extended their leases in advance to secure the future of their Hong Kong base in an increasingly competitive market for quality warehouse space.
The group’s portfolio occupancy continued to increase in the fourth quarter to reach 96.4%, the highest since June 2009, reflecting the strong market fundamentals and improving sentiment in the Hong Kong market. The leasing transactions in the fourth quarter alone contributed net rental income per annum of HK$96.3 million.
Mr Philip Pearce, Goodman’s Managing Director, Greater China said, “Goodman's portfolio continued to deliver strong and sustainable growth. The occupancy rate has steadily climbed throughout 2010, thanks to Hong Kong’s continued economic growth, strong external trade and improved cargo volumes which grew by 15.1% last October. During the quarter we experienced considerable leasing activity across the whole portfolio.”
Eight new customers were added to the portfolio including Sumitomo Warehouse, leasing over 28,000 sq ft and 10,000 sq ft at Tuen Mun Distribution Centre, Tuen Mun and Texaco Centre, Tsuen Wan respectively; Kaga Devices committing to over 21,000 sq ft at Texaco Centre; and Him Kee Food Distribution moving into a 63,000 sq ft premises at East Asia Industrial Building, Tuen Mun.
Renewals accounted for over 60% of the total space leased during the quarter whilst expansion by existing customers represented 68% of all the new lettings, in line with the transactions that took place over the past 12 months.
“We are encouraged by the renewals from existing customers, which accounted for the majority of the completed leasing transactions in both the December quarter and the full year. This clearly indicates strong business momentum driven by our customers' confidence and satisfaction with Goodman's portfolio quality, exceptional customer service model and the expertise of our on-site building services team.”
Mr Pearce concluded, “The vibrant growth of external trade has resulted in greater demand for high quality, well located logistics facilities as businesses leverage Hong Kong’s strengthening domestic consumption and the city’s strategic location as a gateway for distribution and logistics services in Greater China. This has resulted in a more buoyant leasing market, with rents rebounding 19.0% over the past 12 months. The market is expecting external trade to remain robust in 2011 and that could further boost the demand for industrial space. Goodman is well- positioned to capitalise on this trend and continue delivering exceptional performance.”
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