News Content

Tenders invited to build premium warehouse facility near HKIA

AIRPORT Authority Hong Kong (AAHK) has invited tenders for the development and operation of a premium warehouse at Kwo Lo Wan (KLW) in Hong Kong International Airport's (HKIA) South Cargo Precinct aimed at reinforcing Hong Kong's air cargo leadership, promoting trade and stimulating additional air cargo flow.

The new KLW premium warehouse will occupy a site of 5.3 hectares and have an expected gross floor area of approximately 4 million sq ft, making it the third-largest warehouse in Hong Kong. It will boost the supply of premium warehouse space in the city by 15 to 20 per cent when completed in 2023, the South China Morning Post reported.

"Ever since 2010, HKIA has been the world's busiest cargo airport. The airport's strong growth in air cargo has continued in 2017 with tonnage of more than 4 million, representing year-on-year growth of almost 10 per cent in the first 10 months of the year," explains Cissy Chan, executive director, commercial, AAHK.

Hong Kong currently offers 40 million square feet of warehouse space, with half serving the premium category. But with occupancy averaging 90 per cent, this supply - especially in the premium category - is very tight.

"Our specifications for this facility are very high," says Ms Chan. "We want to future-proof it against long-term logistics demands. As such, we require ramp access to most floors, a ceiling height of at least 6.5 metres, and floor loading of at least 350 pounds per square feet to enable the use of large-scale robotics and automation. We believe this is a welcome move for the logistics industry."

E-commerce retail sales have grown exponentially in the past few years, and this momentum is expected to continue. According to a study conducted by Seabury Consulting, cross-border e-commerce in China generated an estimated 1.28 million tonnes of air cargo in 2016.

"We aim to capture more cross-border e-commerce and its related businesses with the opening of this new premium warehouse," says Ms Chan. "Online shopping is all about instant gratification, so delivery time is of the essence. Hong Kong is strategically located in the centre of Asia, with half of the world's population within a five-hour flight. We are a major transportation hub offering an excellent flight network serving 220 destinations."

In July 2017, the Cathay Pacific Group, three cargo terminal operators and three ramp handling operators achieved IATA CEIV Pharma accreditation, a globally recognised and standardised certification for pharma air freight shipments. HKIA has been recognised as an IATA CEIV Pharma Partner Airport.

"Tenders will be judged on multiple factors rather than bid price alone. We expect bidders to have a vision for the future of the air cargo and logistics industry, and a plan to realise their vision with tailored design for the warehouse and its facilities. This is a strategic development to increase air cargo tonnage at HKIA and further consolidate our leading position in the global air cargo industry. Therefore, we will place great emphasis on the development proposals," added Ms Chan.