Australian real estate developer Goodman Group announced today that it has signed an agreement to lease 54,880 sqm of logistics space in Suzhou to Cainiao, the logistics firm that supports Jack Ma’s Taobao e-commerce platform.
The deal between Goodman and to Zhejiang Cainiao Networks (Cainiao) provides for the logistics provider to lease space at Goodman Suzhou West Logistics Centre (GSWLC) located in the eastern China province of Jiangsu less than one hour from Shanghai.
According to a statement from Goodman, Cainiao plans to use the space to establish an eastern China regional distribution centre for its Tmall.com online shopping site.
Commenting on the agreement between the two companies, Philip Pearce, Managing Director Greater China for Goodman, said, “This is a significant leasing transaction and we are very pleased to welcome Cainiao to our portfolio.”
E-commerce Demand Filling China’s Warehouses
With this agreement with Cainiao, Goodman has now successfully leased 100% of its 94,100 square metre Goodman Suzhou West Logistics Centre. Filling the warehouse development to capacity is part of a trend in China, as the rise of retail in general, and e-commerce in particular is outstripping the ability of developers to provide space for consolidating and shipping goods.
Speaking of the e-commerce industry’s need for more warehouse capacity, Goodman’s Pearce said, “We continue to see strong demand for e-fulfilment in China in line with the exceptional growth of the e-retailing sector.”
Competing with GLP and Goldman-Backed e-Shang
Goodman, which dominates the market in Australia and has a sizable presence in Hong Kong is among several major international real estate developers competing to cash in on China’s logistics market.
In December Goldman Sachs agreed to provide a US$120 million pre-IPO loan to start-up warehouse developer e-Shang. And earlier this month, Singapore-based Global Logistic Properties (GLP) sold a 34 percent stake in the company to a Chinese investment consortium that includes Bank of China Group Investment and private-equity firm Hopu Funds, together with an unamed additional investor for $2.35 billion.