Retailers sign for space as China business grows China’s logistics property investment is continuing at a rapid pace as retailers sign leases for specialized distribution centers to support their mainland expansion plans. Robust demand for retail and e-commerce logistics is providing warehouse property developers with a constant stream of business in both tier one cities along the coast and in the less developed inland regions. Global Logistic Properties and Goodman Group were both in the mix in the last week, expanding their China warehouse footprints. Goodman signed two new lease agreements with existing customer Decathlon, a leading retailer of french sports apparel and equipment, at the Goodman Citylink development, located in Yanjiao Economic and Technological Development Zone. “The retail sector in which Decathlon operates requires the highest standards in logistics management and warehousing facilities,” said Philip Pearce, managing director greater China for Goodman. “We look forward to supporting their needs as they continue to expand their business in mainland China.” The project has a total gross floor area of 1.3 million square feet and on completion will have a market value in excess of $100 million, Goodman said in a statement. Goodman Citylink is located close to the 6th Ring Road, which links to downtown Beijing, making it an ideal location for international brands to set up their regional distribution centres for northern China. Decathlon, with an extensive retail network worldwide, has signed leases for a combined 613,000 square feet of space in Goodman Citylink, comprising two warehouses of 430,000 square feet and 172,000 square feet. Decathlon will use the facilities to grow its distribution capability in Northern China. “China is a very important market for Goodman, highlighted by the growing demand for prime logistics space, which has now extended to second and third tier cities across the mainland. We continue to invest a substantial amount of capital annually to expand our footprint in this region and to capitalise on that growth,” Pearce said. With the signing of the second lease by Decathlon, Goodman Citylink has reached full occupancy. Decathlon now joins BMW Brilliance Automotive, which last year signed an agreement for Goodman to develop a 355,000 square feet built-to-suit facility for its regional distribution centre for car auto parts in northern China. It also recently leased an additional 129,000 square feet at the development. Goodman currently has 8.4 million square feet of developments underway in key cities including Shanghai, Nanjing, Shenyang Tianjin, Chongqing, Langfang, Changzhou and Hefei, and an 8.6 million square feet development target for the next 12 months. Global Logistic Properties (GLP) signed new lease agreements totaling 936,000 square feet with three third-party logistics companies in eastern and mid-western China, extending strategic partnerships with Sinotrans and Best Logistics. “Increasing domestic consumption and e-commerce sales are driving demand for 3PL services, which is in turn driving demand for modern logistics facilities across China,” said Kent Yang, president of GLP China. Eighty percent of GLP’s China portfolio is geared toward domestic consumption where e-commerce growth is generating dream results for the Singapore-listed logistics property developer. GLP Chairman Ang Kong Hua said in the 2014 report that daily consumer goods-related customers comprised more than 40 percent of the company’s total leased area in China, forming a strong and stable base from which to drive growth. GLP has increased space leased by e-commerce customers at a compound annual growth rate of 105 percent. The developer estimates the market opportunity in China’s logistics property development sector to be in excess of $2.5 trillion by 2029 and plans to accelerate its development to capitalize on the market opportunity. Over the last decade, GLP has built the largest logistics platform in China, valued at more than $8.2 billion. JOC NEWS - SEPT 11 2014
Posted on: Thu, 11 Sep 2014 17:08:08 +0000
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