About five companies are negotiating to take space in the first of up to 20 logistics centres being planned on the mainland by China Distri-Park and mainland investors. The first centre, valued at $170 million, is under construction in Shekou. Edmond Chan, the firm's marketing and sales manager, said it would be considerably cheaper for operators in Hong Kong to transport their goods across the SAR border, store them at Shekou and then ship them back to Hong Kong. 'Hong Kong-based tenants could save 20 per cent in storage and transport costs,' he said. China Distri-Park is a joint venture between United States real-estate giant Trammell Crow International and Prudential Assurance. Its mainland partners in the Shekou project are China Merchants, China Merchants Shekou Port Service and China Merchants Shekou Industrial Zone Real Estate. Mr Chan expects to finalise tenancy agreements with four companies by the time construction of the 218,000 square foot complex is complete by the end of this year. 'We are about to sign memorandums of understanding and this will be followed by formal tenancy agreements. People like to see completed projects before they commit themselves,' he said. The building will be finished by early December. A Hong Kong-based team of international consultants including structural engineer Ove Arup and Partners, architect RMJM, and quantity surveyor Levett & Bailey has been retained to ensure the facility meets international standards. The Shekou complex will be a consolidation and export centre for mainland and Hong Kong manufacturers and suppliers using the nearby Shekou container port. But similar centres being planned elsewhere in China will serve as regional distribution centres. The firm hopes to build 15 to 20 facilities in major cities and seaports at a cost of up to $1.55 billion. The investment will be shared equally by Trammell Crow and Prudential Assurance. Sites in Guangzhou and Shanghai already have been identified and it is hoped to start construction of these by the end of this year. This will be followed by warehouses in Beijing and Chengdu, Sichuan province. 'We are still looking at sites. They have to be supported with very good infrastructure,' he said. 'All will be built with very high ceilings with a main storage area for racking and hi-tech systems,' he said. They will range in size from 272,000 sq ft to 327,000 sq ft. The firm will offer some value-added services including light packaging. The Shekou centre will be the only one serving that city, but Mr Chan is looking at the possibility of building a complex in Yantian and two or three centres in key ports, including Shanghai. 'We will consider building more than one in particular cities, but it depends on market demand,' he said.