logisticsresearch report

White paper on China’s logistics real estate market in 2021 From Jones Lang LaSalle

The following is the White paper on China’s logistics real estate market in 2021 From Jones Lang LaSalle recommended by recordtrend.com. And this article belongs to the classification: logistics, research report.

After a golden decade of vigorous development, thanks to the quality and capacity improvement of the consumer market, the steady expansion of e-commerce and other factors, China’s logistics real estate has formed a market pattern relying on large urban agglomerations and coexistence of multiple core logistics hubs in the process of regional economic integration.

2021 is the first year of China’s 14th five year plan. In the 2035 vision outline (Draft), it is mentioned to improve the modern logistics system – reduce costs and improve the level of intelligence and intelligence, which also puts forward higher requirements for the development of logistics industry. From the perspective of investment market, the proportion of logistics real estate in China’s bulk property investment has risen from 5% in 2019 to 14% in 2020. In this context, Jones Lang LaSalle recently released the white paper on China’s logistics real estate market, which provides insight into China’s logistics real estate market from three dimensions of development power, market pattern and investment track, and then looks forward to the future trend.

Development impetus

Tradition driven sustainable growth

Emerging drivers release new demands

In the past decade, China’s logistics real estate has achieved great development, and the continuous release of its demand is driven by multi-dimensional factors: the traditional driving factors represented by social consumption, third-party logistics, e-commerce, traditional retail and manufacturing industry are the important cornerstone of the stability of the logistics real estate market; on the other hand, under the catalysis of social consumption upgrading and epidemic situation, China’s logistics real estate market is developing rapidly Emerging driving factors, such as cold chain logistics, fresh e-commerce, medical and pharmaceutical, community group buying and so on, are gradually derived from the industrial market.

Market structure

Urban agglomeration creates core logistics hub

Satellite city undertaking spillover demand

With the regional economic integration, China’s logistics real estate has formed a basic market pattern based on large-scale urban agglomerations and coexistence of multiple core logistics hubs. By 2020, 70% of China’s non bonded high-level inventory resources are concentrated in the Yangtze River Delta, Chengdu Chongqing, Pearl River Delta and Beijing Tianjin Hebei Urban Agglomeration.

The performance of logistics real estate leasing market in Beijing, Shanghai, Shenzhen and Guangzhou is significantly better than that in other cities in China, with an average daily rent of 1.56 yuan / m2. Under the background that the supply of core logistics hub is in short supply, the administrative boundary of urban agglomeration is gradually broken, and the transportation infrastructure is gradually interconnected, the satellite cities represented by Kunshan, Taicang, Dongguan and Foshan are able to undertake the spillover demand and then develop rapidly, becoming an important driving force for the development of regional logistics market. The rent performance of some core logistics hub satellite cities even exceeds that of the main second tier cities, and the lease demand is dynamic.

Investment track

Increasingly favored by long-term capital

Acceleration mode has been turned on

For a long time, compared with other commercial real estate categories, logistics real estate has attracted a large number of long-term capital such as national sovereign funds, pension funds and insurance funds with its high rate of return on investment. Since last year, driven by multiple factors, the capital market has focused on logistics real estate to a new height. In 2020, the global single asset class funds will be concentrated, and logistics real estate is the asset class most favored by investors, accounting for 48% %。 Looking back at the Chinese market, the proportion of logistics real estate in the bulk property investment has increased from 5. 5% in 2019 to 5 % 14% in 2020 %。

According to the statistics of Jones Lang LaSalle, the capitalization rate of logistics real estate is better than that of office buildings and risk-free investment returns in major international cities. In the Chinese market, in addition to entering the logistics real estate in the form of asset acquisition, in recent years, more and more investors have arranged the logistics real estate in the form of joint venture projects or strategic cooperation. We expect that this upsurge is in the ascendant.

Future trends

Expansion and upgrading highlight the pattern change

Public offering REITs brings historic opportunities

China’s logistics real estate market is undergoing expansion and upgrading. The new retail model represented by fresh e-commerce and community group buying is driving the demand for product distribution to be more and more diversified. The growth of the demand for “last kilometer” warehouse distribution from transit station to consumer terminal may make “warehouse store integration” one of the development trends of logistics real estate, which also provides new ideas for the development of some physical retail industries.

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