Logistics space demand stays steady in delta
By Cherry Cao |
June 5, 2012, Tuesday
|
Print Edition
Print Edition
DEMAND for quality logistics space remained solid in the Yangtze River Delta region in the first quarter of this year with strong leasing activities witnessed in all major markets, according to leading international real estate services provider DTZ.
In Shanghai, demand was mainly concentrated in Jiading, Qingpu and Songjiang districts. Serving as the most important logistics gateway for both Shanghai and Jiangsu Province due to its location and major infrastructure facilities, Jiading continued to be the most sought area in the city in terms of logistics space during the past quarter for business occupiers such as Taobao Mall and 360buy.
Songjiang, meanwhile, also saw a stable growth during the January-March period with major leasing transactions concluded.
ST-Anda Logistics Co, Yili Group and E-Mart together leased approximately 80,000 square meters of space in the Vailog Songjiang Logistics Park, while around 60,000 square meters of space in Blogis's Songjiang Port Phase Two are set to be leased out in the second quarter.
In neighboring Jiangsu and Zhejiang provinces, there were also several major deals signed during the quarter. Sany Group and Benchmark, a domestic business-to-consumer logistics company, committed space of 12,000 square meters and 19,000 square meters, respectively, in Goodman's Lujia Logistics Park in Kunshan. SF-Express, a major courier service provider in China, also leased a 25,000-square-meter warehouse in Prologis Jiaxing Logistics Park.
Rental
In terms of the bonded warehouse sector, rentals in Jiangsu - Suzhou and Kunshan in particular - continued to climb during the quarter though those in Shanghai remained the highest.
Currently, the average rental in Jiangsu is about 25 percent lower than in Shanghai, which could help explain why some tenants chose to relocate out of the city's Waigaoqiao bonded area and moved into similar facilities in Jiangsu.
For non-bonded warehouses, rents vary significantly in Shanghai, Jiangsu and Zhejiang. The average rental in Shanghai continued to top the chart due to the relatively high cost of land acquisition and the willingness of the market to accept a higher charge for prime warehouse space.
Vacancy
In the first quarter, the overall warehouse vacancy rate in Shanghai remained at 4.5 percent, a very healthy level. However, the vacancy rate in Jiangsu stood at a high of 14 percent due to a large volume of non-bonded warehouse stock yet to be absorbed.
In fact, apart from activity witnessed in Kunshan, take-up strength in a large part of the province seemed subdued, with no major transactions concluded. In contrast, limited supply accompanied by buoyant take-up activity in Zhejiang bought the vacancy level there to a new low of 1.7 percent.
In Shanghai, overall vacant warehouse space, both bonded and non-bonded facilities, totaled 569,494 square meters at the end of March.
Investment
Only one land transaction, completed in Lingang Logistics Park and valued at 15.05 million yuan (US$2.38 million), was recorded in Shanghai in the first three months of this year. That compared to six deals with a total price of 230.7 million yuan recorded in the previous quarter. Suzhou, meanwhile, saw more activity in land transactions during the same period. Five plots costing a total of 47.36 million yuan were sold, compared to none registered in the fourth quarter of last year, DTZ data showed.
Supply
According to DTZ's industrial logistics survey, Shanghai's future prime non-bonded warehouse space will mainly arise from major developers such as Vailog, Goodman and Prologis. Land inventory held by Vailog and Prologis is relatively dispersed in terms of locality, while Goodman's land stock is mainly clustered around Pudong International Airport.
The total leasable area from Goodman's airport project is planned to reach 192,588 square meters. This, together with GLP's Pudong Airport Logistics Park and Heqing Logistics Park, could increase the total future leasable area in the Pudong airport area to 466,599 square meters - thus making it the third largest logistic center in the city after Waigaoqiao and Lingang areas.
Meanwhile, as DTZ has forecast, future land supply in Jiangsu is mainly to be found in Kunshan and Suzhou, while in Zhejiang, Jiaxing City and Jiashan County are the two areas where major industrial real estate players such as Prologis and GLP have confirmed their future projects.
In Shanghai, demand was mainly concentrated in Jiading, Qingpu and Songjiang districts. Serving as the most important logistics gateway for both Shanghai and Jiangsu Province due to its location and major infrastructure facilities, Jiading continued to be the most sought area in the city in terms of logistics space during the past quarter for business occupiers such as Taobao Mall and 360buy.
Songjiang, meanwhile, also saw a stable growth during the January-March period with major leasing transactions concluded.
ST-Anda Logistics Co, Yili Group and E-Mart together leased approximately 80,000 square meters of space in the Vailog Songjiang Logistics Park, while around 60,000 square meters of space in Blogis's Songjiang Port Phase Two are set to be leased out in the second quarter.
In neighboring Jiangsu and Zhejiang provinces, there were also several major deals signed during the quarter. Sany Group and Benchmark, a domestic business-to-consumer logistics company, committed space of 12,000 square meters and 19,000 square meters, respectively, in Goodman's Lujia Logistics Park in Kunshan. SF-Express, a major courier service provider in China, also leased a 25,000-square-meter warehouse in Prologis Jiaxing Logistics Park.
Rental
In terms of the bonded warehouse sector, rentals in Jiangsu - Suzhou and Kunshan in particular - continued to climb during the quarter though those in Shanghai remained the highest.
Currently, the average rental in Jiangsu is about 25 percent lower than in Shanghai, which could help explain why some tenants chose to relocate out of the city's Waigaoqiao bonded area and moved into similar facilities in Jiangsu.
For non-bonded warehouses, rents vary significantly in Shanghai, Jiangsu and Zhejiang. The average rental in Shanghai continued to top the chart due to the relatively high cost of land acquisition and the willingness of the market to accept a higher charge for prime warehouse space.
Vacancy
In the first quarter, the overall warehouse vacancy rate in Shanghai remained at 4.5 percent, a very healthy level. However, the vacancy rate in Jiangsu stood at a high of 14 percent due to a large volume of non-bonded warehouse stock yet to be absorbed.
In fact, apart from activity witnessed in Kunshan, take-up strength in a large part of the province seemed subdued, with no major transactions concluded. In contrast, limited supply accompanied by buoyant take-up activity in Zhejiang bought the vacancy level there to a new low of 1.7 percent.
In Shanghai, overall vacant warehouse space, both bonded and non-bonded facilities, totaled 569,494 square meters at the end of March.
Investment
Only one land transaction, completed in Lingang Logistics Park and valued at 15.05 million yuan (US$2.38 million), was recorded in Shanghai in the first three months of this year. That compared to six deals with a total price of 230.7 million yuan recorded in the previous quarter. Suzhou, meanwhile, saw more activity in land transactions during the same period. Five plots costing a total of 47.36 million yuan were sold, compared to none registered in the fourth quarter of last year, DTZ data showed.
Supply
According to DTZ's industrial logistics survey, Shanghai's future prime non-bonded warehouse space will mainly arise from major developers such as Vailog, Goodman and Prologis. Land inventory held by Vailog and Prologis is relatively dispersed in terms of locality, while Goodman's land stock is mainly clustered around Pudong International Airport.
The total leasable area from Goodman's airport project is planned to reach 192,588 square meters. This, together with GLP's Pudong Airport Logistics Park and Heqing Logistics Park, could increase the total future leasable area in the Pudong airport area to 466,599 square meters - thus making it the third largest logistic center in the city after Waigaoqiao and Lingang areas.
Meanwhile, as DTZ has forecast, future land supply in Jiangsu is mainly to be found in Kunshan and Suzhou, while in Zhejiang, Jiaxing City and Jiashan County are the two areas where major industrial real estate players such as Prologis and GLP have confirmed their future projects.
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