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The above examples are just a tip of the iceberg threatening the logistics industry. In fact, the supply of logistics space is far behind
the industry’s demand. While the trading and logistics sector's GDP contribution grew by 51% from 2009 to 2018, built-up industrial
land recorded only a meagre increase of 8%. In particular, a supply vacuum of new warehouse spaces in the past decade has pushed
down vacancy rates and driven up rents. Meanwhile, the existing flatted factories in the city, designed during the industrial era, are
simply not suitable for the market’s needs, as logistics operators look for modern facilities with a large floor plate, high ceilings and
direct ramp access.

The under-supply of industrial space has pushed logistics operators to operate on sites without proper planning and infrastructure
in the New Territories, resulting in the emergence of brownfield. Currently, of the 1,414 hectares of active brownfields, 651 hectares,
or 46%, are occupied by logistics-related industries. Unfortunately, operations on brownfields are far from optimal, with unplanned
development polluting the environment and upsetting nearby residents. This outcome is a negative externality that is currently borne
by the community.
To support sustainable growth of the logistics sector, we believe that the way forward is for the Government to commit to a timely
and adequate provision of land and facilities. Equally important is to implement policies under an effective governance structure in
support of our strategic industries as a whole.

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