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May 22, 2020

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Warehouses to remain in big demand

China’s Grade A warehouse stock will continue to expand and develop in the next 10 years after quadrupling over the past decade, according to an industry white paper by international property adviser JLL.

Between 2010 and 2019, occupied Grade A warehouse stock in China’s leading markets rose from some 11 million square meters to around 48 million square meters, representing an annual growth rate of 18.4 percent, JLL data showed.

For the decade ahead by 2030, continued growth in China’s consumer sector will support further development of the Grade A warehouse market to make it bigger, more complex, more mature, and even more essential than it is today, said the white paper, which includes an outlook on China’s logistics market and outlines trends that will allow investors and developers to future-proof their strategies and properties.

“As China’s consumer market continues to grow with evolving trends, investors and operators must adapt to changes in how retail sales manifest as warehouse demand,” said Richard Huang, head of supply chain and logistics service for JLL in China. “With some of the market’s biggest warehouse occupiers increasingly turning to self-use space, it is essential for property owners to consider other evolving and emerging types of tenants.”

The long-term robust outlook for China’s consumer sector, which is forecast to rise from 41 trillion yuan (US$5.76 trillion) in retail sales last year to 112 trillion yuan by 2030, will continue to propel new requirements for distribution space. Meanwhile, consumers expecting ever-faster omni-channel delivery will also boost tenants’ demand for upgrading to modern Grade A warehouses.


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