New | Cross-border e-commerce a boon for China's bonded logistics properties

Cross-border e-commerce that enables consumers to buy directly from merchants around the world and save taxes is rapidly gaining popularity in China.

While online shopping growth is emerging as a threat to retail property owners, the new trend is expected to boost bonded logistics property developments, say property consultants.

"Rents of bonded logistics developments [in Shanghai] have been rising in the past four to five years" because supply had not caught up with demand, said Carlby Xie, the head of China research at Colliers International.

The average rent for a bonded logistics facility in Shanghai was about 1.26 yuan per square metre per day last year, according to Colliers' latest report on the outlook of the bonded logistics sector. That compares with an average rent of below 1.10 yuan per square metre per day in 2010.

"Chinese online shoppers buying goods from overseas have the potential to benefit bonded logistics property because e-commerce operators that conduct overseas business may choose to store [frequently purchased] goods in bonded warehouses where they will not incur customs duties," said Rita Wong, an international director of valuation advisory services at JLL. She said examples of this practice had been observed in bonded logistics areas in Ningbo and Hangzhou with firms selling baby and children's goods.

Popular products bought through cross-border sales include cosmetics and skin-care products, women's apparel, baby milk powder and food supplements.