Global Logistics Properties has leased another 89,000 square metres (958,000 sq ft) of warehouse space in China as the Singapore-based developer of distribution facilities continues its quest to dominate the mainland’s rapidly growing logistics real estate sector.
The developer, which is commonly known as GLP, signed the new lease agreements with three major retailers in China, including hypermarket chain Carrefour. The retailers are said to need the new distribution space to keep pace with growing consumer demand, according to a statement from GLP.
Although growth in Chinese consumer spending has been trimmed back lately, GLP’s results appear to indicate continuing demand from national-level retailers for more distribution centres to support their business. This most recent announcement from the company, which builds and operates warehouses in China, Japan, Brazil and the US, marks the third straight month that GLP has announced new leases of 89,000 square metres or more on the mainland.
GLP Encouraged by China’s Consumer Demand
Following this latest set of new leases, GLP’s China leadership appears encouraged about the prospects for further growth in China’s consumer economy.
“Growing domestic consumption continues to drive demand for GLP’s modern facilities across China and we are very pleased to extend our partnership with these major retail leaders and support their growth,” Kent Yang, President of GLP China said in a statement.
During recent years China’s government has been emphasising growth in consumer spending as it seeks to steer the country away from an export-led model for economic growth. And GLP seems ready to bet heavily on this prospect.
In July the developer, which is closely-linked with the Singapore government, closed on its new $7 billion China Logistics Fund II, or CLF II, which aims to deploy fresh capital for building more distribution centres on the mainland. The fund was more than double the size of the company’s previous China fund.
When 90,000 Sqm is a Low Point
While GLP’s latest announcement is encouraging news, it represents the lowest announced leasing results for the developer in the last three months.
In early September GLP announced 90,000 square metres of new deals in China after signing leases with five occupiers including an auto parts maker, a food manufacturer and third-party logistics providers. Four of the leases were signed with repeat customers, who were reportedly expanding their businesses.
Despite the summer heat, in early August, the developer reported its biggest results of the quarter with 104,000 square metres of new leases, also via deals with five clients.