Pat McGillycuddy of Gazeley
Logistics real estate developer Gazeley recently announced plans to set up a new 77,000 square metre distribution centre in the city of Wuxi in China’s Jiangsu province as the country’s retail boom continues to fuel demand for logistics space.
According to a statement from the UK-based developer, the first phase of development for the project title G. Park Wuxi commenced at the start of May with the construction of a 24,000 sqm warehouse which the company plans to lease out on a speculative basis. The remainder of the site will be developed in 2015 and will also be available for customer build-to-suit requirements.
Commenting on the new project, Gazeley CEO Pat McGillyCuddy said, “The acquisition of this site in Wuxi represents a strong signal of intent in terms of Gazeley’s future plans, determination and commitment to China.”
The acquisition of the Wuxi site by Gazeley is the first that they company has made since being acquired by Brookfield last year. According to the developer’s statement, G. Park Wuxi represents the start of a concerted period of China investment which is to include Tianjin, Greater Beijing Area, Nanjing, Wuhan and Chengdu.
Retail Expansion Driving Warehouse Demand
The rapid expansion of China’s retail sector, particularly the boom in ecommerce, has fueled demand for international grade logistics properties, and warehouse development has drawn significant investor interest in recent months.
During December, Goldman Sachs agreed to provide a US$120 million pre-IPO loan to Shanghai-based start-up warehouse developer e-Shang, and in August last year, Equity International, a private equity firm run by US investor Sam Zell announced a strategic partnership with Asia-focused logistics real estate fund, The Redwood Group for expansion of Redwood’s logistics property platform in the region.
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