Australian real estate developer Goodman scored another build-to-suit victory this week when it announced an agreement with automaker BMW Brilliance to expand an existing warehouse project in Hebei, China.
Under the terms of the new deal, the industrial property builder will be expanding the size of a planned facility in its Goodman Citylink project in the city of Langfang, close to Beijing’s sixth ring road. The project is located in Langfang’s Yanjiao Economic and Technological Development Zone.
Goodman Benefitting From BMW’s Brilliant Performance
In October last year Goodman signed an agreement with the joint venture maker of BMW cars to develop a 33,300 sqm build-to-suit facility at the site. That project was tabbed to provide a regional distribution centre for auto parts in Northern China. In September, the Aussie developer had announced that BMW Brilliance had already leased an additional 12,275 sqm at the development.
In a statement, Goodman said that BMW Brilliance Automotive’s growth over the last 12 months had created need for a further 12,270 sqm of warehouse space.
On completion, the new build-to-suit facility will have a total gross floor area of 45,500 sqm and will replace the automaker’s three existing distribution centres around Beijing to become its regional auto parts distribution centre for Northern China.
Commenting on this latest deal, Philip Pearce, Managing Director Greater China for Goodman said, “The demand for high-quality warehousing space continues to surge in Northern China, and is driving the expansion of our footprint in this region, backed by our extensive resources, access to capital and a significant land bank.”
Goodman’s Citylink in Langfang is being built around a pre-existing 26,500 square meter warehouse, which has been leased long-term to a multinational retailer. When complete, the distribution centre will include an additional five single-storey warehouses, and will total 130,000 square metres of prime logistics space.
Goodman Rapidly Building Its China Portfolio
The announcement of the expanded project in Hebei comes less than a week after Goodman had revealed a 76,400 square metre build-to-suit deal in Nanjing with third-party logistics provider Best Logistics.
With all of China’s warehouse developers racing to catch up with market leader Global Logistic Properties, the Australian industrial specialist appears to be making headway in 2014.
China’s logistics real estate market continues to outperform other sectors such as residential and commercial, and during the last 12 months major investors such as Blackstone, Fosun, Brookfield, Temasek and PGGM have all entered the market in pursuit of its nine percent average investment yields.