Global Logistics Market: Enter the Dragon Winter 2005


China’s emergence as a global economic power is having a seismic impact on the global logistics market says international property adviser DTZ.

According to DTZ’s Global Logistics Markets report, the global logistics market has been given a massive boost in recent years by the growth in world trade mainly attributed to China’s low cost manufactured goods.
The Asian industrial and logistics market has benefited most from China’s meteoric rise to one of the world’s leading economies.  The number of containers handled at China’s mainland ports increased by an astonishing 1,200% between 1994 and 2003 resulting in a thriving logistics market, particularly in Shanghai, Shenzhen, Guangzhou and Beijing.  Demand for warehousing space is rising resulting in a surge in rents – in the spring of 2005, average sales and rents across Shanghai’s 11 major industrial zones saw increases for the sixth consecutive quarter.

Space availability in key locations in China has been tight where new supply was increasingly owner-occupied or built-to-suit premises driving up land prices.  The opening of a new deep-water port (Yangshan) in Shanghai at the end of 2005 will further increase warehouse investment opportunities.  As will the port at Shenzhen which is designated to become a major distribution centre for southern China and an international transfer hub.

Developers are responding quickly to meet the demands of the growing logistics operators and associated port business.  US firm ProLogis is already investing heavily in Asia, hatching plans to pour US$1.25 billion of equity into China alone by 2009 into new schemes in Shenzhen, Suzhou, Guangzhou, Beijing and Tianjin.

Moving the focus to Europe – a sharp increase in imports from China, which amounted to US$115.4 billion in 2003, has been one of the critical catalysts to growth in the European logistics market in the last 12 months.

The northern range of ports, from Le Havre to Hamburg, handle most Chinese imports arriving by sea.  Since early 2004 the ports of Rotterdam, Hamburg and Antwerp – better known as the gateway of Europe – have experienced above average trade growth with Hamburg being the main entry point for goods from China.  As a result of this, in the second quarter of 2005, Hamburg witnessed the highest take-up of logistics property in Germany (over 300,000 sq m) and unprecedented levels of investor interest. 

Occupier demand is emanating from the German logistics operators, who are keen to provide storage and distribution space for the increasing export from Germany as well as the growing number of Chinese shipping companies entering the port.  As a result the leasing market has seen growth of around 50% with a steady rise in rents. 

A similar trend of growth is mirrored in Holland where developers are finally starting to catch up with increasing demand for warehousing around Rotterdam’s port with experts estimating that in the last two years, 90% of total growth in trade at the port has originated from China.  Likewise to the south of Europe in Italy, demand for warehousing space has surged around the southern Gioa Taouro port where new logistics space is being developed, again as a result of the growing trade with Asia and China.

Across the other side of the Atlantic, Los Angeles takes the crown as the strongest industrial market in North America with the lowest vacancy rates.  Despite a declining manufacturing sector, demand for space in LA far exceeds supply driven by the increasing levels of Asian-made goods entering via the two major ports of Los Angeles and Long Beach.  As trade from China rises, so has the level of congestion, which is a key constraint on market expansion.  A scarcity of development land to meet this demand is fuelling the eastwards migration of the booming logistics industry to cities such as Hesperia, Victorville and Barstow.

Traditionally, Europe has been the primary market for the port of New York, New Jersey.  However in 2004, 43% of business was with Asia, in particular China, from shipping companies trying to avoid the busy west coast ports.

Australia’s logistics markets have continued to strengthen, again driven by increasing trade with Asia.  Industrial rents in Brisbane increased by 10/15% in 2004 while industrial land prices increased by 50%.

Simon Lloyd, Director of Logistics at DTZ comments: “The negative impact of China’s rise on the manufacturing sector is balanced by phenomenal growth in logistics activity in all of the world’s industrial markets.  In particular, sites near ports and airports have benefited.  As demand has grown, rents around ports including Shanghai, Singapore, Rotterdam, Hamburg and Los Angeles have risen and yields have hardened.

“As global ports and airports become more congested, we expect to see secondary ports emerging as key distribution centres, especially in Europe where the Motorways of the Sea initiative will promote intra-European transport networks, including Hull in the UK, Zeebrugge in Belgium and Tallin in Estonia amongst many others. We are already seeing evidence of developers investing in these emerging markets with the likes of Gazeley and ProLogis investing in new developments around European ports including Dunkirk and Marseille.



Schreibe einen Kommentar

Translate »