ESR Completes Wenzhou Ruian Logistics Park in Eastern China’s Zhejiang Province

ESR on Friday announced the completion of a warehouse complex in the eastern Chinese city of Wenzhou to serve industrial manufacturing and logistics storage clients.

Located in the Wenzhou Ruian Economic Development Zone in Zhejiang province, ESR Wenzhou Ruian Logistics Park has a planned gross floor area of more than 129,000 square metres (1.4 million square feet) and sits 25 kilometres (15.5 miles) from Wenzhou Longwan Airport, the HKEX-listed industrial giant said in a release.

The three-storey facility incorporates a concrete-filled steel tubular system meant to resist wind and seismic forces, ESR said, and there are plans to install solar panels. The logistics park enjoys proximity to Ruian City, the core production base of car and motorcycle parts in Wenzhou, a wealthy port city and industrial hub on the southeast coast of Zhejiang province.

“The accelerated growth of e-commerce and continued resilience of the supply chain drive the demand for modern logistics facilities that enable high operational efficiency, while encompassing sustainability features,” said ESR co-founders and co-CEOs Jeffrey Shen and Stuart Gibson. “ESR Wenzhou Ruian Logistics Park will further benefit from the local government’s focus on growing leading industries such as auto parts, mechanical equipment and polymer materials, as well as emerging industries including digital economy, intelligent equipment manufacturing and life sciences, which will all require high-quality logistics spaces.”

Year-End Flourishes

ESR’s latest milestone comes after the Hong Kong-based asset manager last week revealed plans for a China REIT seeded with three of the group’s logistics projects west of Shanghai, as the group looks to securitise mainland assets after authorities cleared the way for onshore listed trusts last year.

ESR is considering listing the trio of projects in the city of Kunshan in eastern Jiangsu province through a publicly offered infrastructure securities investment fund on the Shanghai Stock Exchange.

The proposed REIT’s three seed assets span more than 427,000 square metres of gross floor area in Kunshan’s Huaqiao town, roughly midway between Shanghai and Suzhou, as part of ESR’s Kunshan Huaqiao Park complex.

As of June, ESR’s China assets under management totalled $32 billion across 13.9 million square metres of gross floor area.

Sector to Outshine

Logistics demand in China is expected to hold up better than activity in other sectors as institutional capital continues to pile into warehouse assets, according to JLL.

In its Asia Pacific Outlook 2023 report, the property consultancy named logistics as one of its top investment picks for China (along with multifamily residential). Beijing is forecast to be the top market for capital value growth in logistics among single cities next year, with a 6.7 percent increase, while Hong Kong is in line for a 3.8 percent rise, JLL said.

The agency estimates that 25.9 million square metres of new logistics supply will come on stream in 2023 throughout Asia Pacific, though rising construction costs and interest rates could lead to a moderation in the future pipeline as projects are potentially delayed.