China property

Major domestic corporations making major inroads into China’s high-end logistics market

PUBLISHED : Tuesday, 15 March, 2016, 8:00pm
UPDATED : Tuesday, 15 March, 2016, 8:00pm

Major domestic corporations are making major inroads into China’s high-end logistics market, says a report by international property consultant DTZ/Cushman & Wakefield.

China Vanke, Ping An and Shenzhen International Logistics Development have been expanding into the logistics industry, propelling them into the ranks of the top 10 logistics companies in the country, the consultant said in the report.

“Even though [Global Logistic Properties] still accounts for more than 50 per cent share of the logistics market in China, its leading position has recently been heavily challenged by some newer market entrants,” Tony Su, the head of industrial and logistics property services for China, at the consultant, said in the report.

“Among the newcomers, the rapid expansion of Yupei, E-shang and Ping An will all substantially impact on overall performance of the logistics market. The market is currently witnessing a reshuffling of the position of its major players, which commenced in earnest in 2015,” Su wrote.

DTZ/Cushman & Wakefield highlighted Vanke, Ping An and Cainiao Network Technology as three of the more outstanding entrants to China’s logistics scene.

The rapid expansion of Yupei, E-shang and Ping An will all substantially impact on overall performance of the logistics market
Tony Su, DTZ/Cushman and Wakefield

In the middle of last year, Vanke, the biggest residential builder in China and building on its strength as a leading financial services provider, established a property market development logistics subsidiary. Since then, it has achieved astonishing results, the property consultant said.

Cainiao relied on its major backer, Alibaba, to develop a method leveraging on its network of community warehouses plus express delivery services. Cainiao does not operate like a traditional property logistics enterprise, but the size of its land reserve will play a decisive role in influencing future market development, it said.

In view of the expansion trend, DTZ/Cushman & Wakefield said the mainland’s tier-one cities were likely to continue to witness the trend of industrial land prices rising faster than industrial rents over the short-term. This is likely to lead to a concentration of investment opportunities in logistics facilities in tier two and three cities.

At present, logistics development projects are heavily clustered in the Pearl River Delta, Yangtze River and Bohai, as well as some major interior cities. It is anticipated that over the next two or three years, some tier two and three cities will provide this sector with sizeable development potential, it said.