Canadian Capital Eyes Hong Kong’s Warehouse Market: A HKD 400 Million Deal for G2000’s Fanling Depot

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Hong Kong’s industrial property sector continues to attract deep-pocketed investors. The latest headline transaction involves fashion retailer G2000’s five-storey warehouse in Fanling, which is now under a preliminary agreement to be sold for about HKD 400 million to a consortium led by a Canadian fund.

Over the past year G2000 has been streamlining its logistics operations, vacating its 123,591 sq ft warehouse at 5–7 On Lok Mun Street and outsourcing distribution to third-party providers. With the building largely empty, the group first offered it for lease and then quietly launched a tender for an outright sale. Market sources say a foreign fund—reportedly backed by Canadian capital—has stepped in with a full-block offer that values the space at roughly HKD 3,236 per square foot.

Should the deal close at HKD 400 million, the buyer will inherit a site area of roughly 36,400 sq ft in one of Hong Kong’s oldest industrial zones. A tenant is already lining up to take the entire building at an estimated rent of HKD 1.6 million per month, translating to an immediate yield of about 4.8 percent. In an environment where prime office yields barely scrape 3 percent, that spread is attractive—even before any upside from future redevelopment or conversion.

For G2000 founder Michael Tien, the disposal is part of a broader asset-light strategy: monetise non-core real estate, redeploy capital into the brand and reduce operational overhead. For the Canadian fund, the move is consistent with a pattern of targeting undervalued industrial buildings in fringe districts such as Fanling, Kwai Chung and San Po Kong, where capital values are still 20–40 percent below those in more established hubs.

The transaction also highlights a subtle geographic shift in Hong Kong’s logistics narrative. As rents in urban logistics hotspots climb and new infrastructure—such as the Northern Metropolis rail links and the planned San Tin Technopole—brings the New Territories closer to both Shenzhen and the city centre, investors are betting on northward spill-over demand. Fanling, traditionally a back-of-house location, is fast becoming a strategic node along the Hong Kong–Shenzhen corridor.

Looking ahead, several variables will determine whether this warehouse becomes a template for further deals. First, will the building be held purely for rental income or repositioned as a data centre, cold-chain facility or even a life-science hub if the government relaxes usage rules? Second, will interest-rate cuts in late 2025 compress yields, making today’s 4-plus-percent return even more compelling when compared with bond alternatives? Finally, will continued demand from 3PL operators and e-commerce brands keep absorption levels healthy in the Northern New Territories?

Regardless of how those questions play out, the proposed sale serves as a reminder that while the residential market remains subdued, Hong Kong’s industrial sector is alive and well—fuelled by cross-border trade, resilient rents and, increasingly, international capital hunting for yield. In short, Fanling’s HKD 400 million warehouse deal is more than a one-off headline; it is a snapshot of a market quietly re-rating itself for the next logistics cycle.