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Recently, DTZ has released a research report-"Review of China's Logistics Real Estate Market in the Second Quarter of 2020". The report shows that benefiting from the acceleration of the resumption of work and production and the support of macroeconomic policies, China's economic growth in the second quarter of 2020 will turn from negative to positive, and GDP will grow by 3.2% year-on-year. In the first half of the year, the online retail sales of physical goods was RMB 4,348.1 billion, a year-on-year increase of 14.3%. Take the online fresh supermarket as an example. In the first half of 2020, active users increased by 69.8% year-on-year, which promoted the expansion of demand for distribution services and warehouses (especially cold chain warehouses) rental in core cities. Cold chain warehouses have become a new hot spot for investment. From a regional perspective, logistics activities in the eastern, central, and western regions remained active, and the western region showed a stronger momentum of recovery.
As of the second quarter, a total of 730,000 square meters of new supply from Mainland China entered the market. The overall vacancy rate of high-standard warehouses in the Mainland increased by 0.4 percentage points from the previous month to 12.5%. The average rent in the mainland market was basically the same as last quarter at 34.9 yuan per square meter per month, a slight decrease of 0.6% year-on-year. Hong Kong’s high-quality logistics warehouses have a total storage volume of approximately 29.6 million square feet. The overall vacancy rate was 3.1% unchanged from the first quarter, and the average rent fell by 7.5% to 12.8 Hong Kong dollars per square foot per month. Taiwan's high-quality logistics warehousing has accumulated about 748,000 square meters (about 2.47 million square meters). The reference rent is about NT$500-600/ping/month.
Regional overview of the national logistics market in the second quarter of 2020
According to the second quarter transaction data, business services, logistics real estate development and e-commerce/express express are the top three industries. Affected by the epidemic, logistics real estate investors are more cautious in choosing regions; logistics land in East China is more concerned by logistics real estate developers, mainly in Suzhou, Wuxi, Xuzhou and Zhenjiang in Jiangsu Province, Hefei and Wuhu in Anhui Province.
Limited by the supply of logistics land, it is difficult to find logistics land in core cities, and there are still logistics land supply in third- and fourth-tier cities. Affected by the increase in the global epidemic and external uncertainties, investment institutions are more cautious in the acquisition strategy of logistics land than in previous years. Due to the scarcity of logistics land in core cities and surrounding areas, stable rental demand and strong resistance to risks, investment institutions are more influenced by investment institutions. attention. From the perspective of second-hand transaction properties, second-hand high-standard warehouses with stable rental rates, long-term leases, high-quality tenants and advantageous locations have become a hot resource in the investment market.
As China's domestic economic growth rebounds, a large amount of capital continues to flood into China's high-standard warehouse market. In the second quarter, GLP completed the transaction of a 15 billion yuan income fund (GLPCIFI). The fund's investment income mainly comes from income facilities in 18 cities in the Yangtze River Delta, Beijing-Tianjin-Hebei and Central China. Lege and LaSalle have jointly raised US$1.5 billion and will further invest in development to serve high-standard logistics warehouse facilities in the core areas of Beijing, Shanghai, Guangzhou and western China. JP MORGAN and Xinyi set up a joint venture platform in China to invest in high-standard logistics facilities around Shanghai, Suzhou and Nanjing.
On April 30, 2020, the China Securities Regulatory Commission and the National Development and Reform Commission jointly issued the "Notice on Promoting the Pilot Work of Real Estate Investment Trust Funds (REITs) in the Infrastructure Sector". Lin Rongjie, Director of the Research Department of DTZ Greater China, said: “This marks the official start of the domestic infrastructure public offering REITs pilot. The pilot notice will untie the constraints of the large-scale development of the logistics industry and provide new channels for the development of the industry by providing effective financing tools. With the pilot implementation of logistics REITs, with the support of huge funds, it is believed that domestic high-standard warehouses will usher in rapid and long-term development."
Su Zhiyuan, Director of the Industrial and Real Estate Department of DTZ China, pointed out: "As companies resume work and production steadily, production capacity is gradually restored, and companies are accelerating their transformation and upgrading. Therefore, investment in logistics-related fixed assets has increased. The business of category and distribution platforms continues to expand in core cities, and in the short term, it will accelerate the demand for inquiries and leasing of warehouses in core cities and surrounding areas, especially cold chain warehouses, which have become a hot new investment trend."