Australian industrial real estate developer Goodman Group started work on its first major project in southern China this month when it broke ground on a 70,330 square metre (757,025 square foot) logistics facility in Huizhou, Guangdong province.
The new warehouse project is part of Goodman Huiyang Industrial Park, located in Huiyang, Huizhou about one hour’s driving distance from Shenzhen. This new facility is the first stage of a planned 232,644 square metre logistics project that the group estimates will be worth RMB 934 million ($147 million) when complete.
While this first part of Goodman’s new project is scheduled for completion in September of next year, China’s industrial developers are still scrambling to meet the demand for new distribution centres to support the country’s fast-growing retail sector.
Goodman Builds Out Logistics Portfolio to Meet Chinese Demand
Despite some scary news about the China’s stock markets this year, the country’s consumers appear unfazed.
The country’s retail sales were up by 10.8 percent in August, compared to the same month last year, according to the National Bureau of Statistics. The August retail results showed growth even faster than July’s 10.5 percent rates, and surprised many analysts.
With consumer demand continuing to grow, warehouse builders such as Goodman are hard pressed to build enough space to lease out. Just last week, Goodman’s competitor, Global Logistics Properties announced that in September it had leased out nearly 90,000 square metres of new space to retailers, the third straight month that its new leases had reached such levels.
Now Goodman is in the midst of a major southern China expansion plan. Philip Pearce, Goodman’s Managing Director Greater for China said, “As we expand our footprint across China, we are excited to commence our first project in Southern China.
And Pearce sees the Huiyang project as an important first step in the region. “Given the excellent connectivity to land, sea and air transportation, and Goodman’s proven ability to meet customers’ specific requirements, we are confident that this project will be well received in the market,” the industry veteran noted.
By starting work in Huiyang, Goodman now has logistics developments underway in Shanghai, Nanjing, Tianjin, Chongqing, Chengdu, Wuhan, Xi’an, Suzhou, Qingdao, and Hefei, in addition to this latest venture.
More Warehouses on the Way in Southern China
Also in Huizhou, the Aussie developer is planning to build a second logistics and distribution facility, Goodman Boluo Logistics Park. With the first phase of 55,000 square metres scheduled for completion in September 2016, the single-storey development is expected to provide a total of 145,000 square metres of logistics space when completed.
Pearce added, “Southern China is an important part of our strategic expansion plan and we aim to invest a significant amount of capital and resources here.”
Located between Shenzhen, Dongguan and Guangzhou, Goodman estimates that its Boluo facility will be within an hour’s drive of all three cities.