Australian industrial developer Goodman Group announced this week that it has signed an agreement to develop a 22,000sqm built-to-suit facility for Best Logistics Technology (Hangzhou) Co. Ltd in Chongqing, China.
The new project will be located in the new Goodman Chongqing Airport Logistics Park, which has a total land area of 284,000 sqm, and is Goodman’s first project in Chongqing.
The distribution centre will be developed in multiple phases, comprising a total of eight warehouses and providing approximately 190,000 sqm of prime logistics space, with an estimated end value of US$130 million. Goodman also recently announced that it will develop a 46,700 sqm built-to-suit facility for Yunda Express, one of the largest privately owned express delivery companies in China, at the same facility in Chongqing.
Best Logistics is one of China’s largest providers of integrated logistics and supply chain management services in mainland China. The company plans to use the new Chongqing warehouse to meet the growing needs of customers in Western China and enhance its integrated logistics services in the region.
Construction of the built-to-suit facility for Best Logistics is scheduled to commence in April 2014, with expected completion in October 2014.
Commenting on the new Chongqing logistics centre, Philip Pearce, Managing Director Greater China for Goodman said “Western China continues to be an area of growth for us. We see surging demand and a lack of supply for prime logistics space in this part of the country, and have invested a significant amount of capital and resources here to ensure we are well positioned to accelerate the future growth of our business.”
Ecommerce Driving Rapid Expansion of China’s Logistics Sector
According to a statement from the company, Goodman currently has a landbank of over 4.3 million sqm in mainland China, with 570,000 sqm of developments underway in key cities including Shanghai, Chongqing, Tianjin, Chengdu, Langfang, Changzhou, Hefei, Shenyang and Nanjing.
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.