Singapore-based provider of logistics facilities, Global Logistic Properties Limited (GLP) has leased 190,000 square meters of logistics space in six different locations across China, to JD.com, one of the largest e-Commerce companies in China.
JD.com said it will utilize
the facilities to optimize and expand its distribution network to meet increasing e-Commerce demand across China. JD.com is one of GLP’s largest customers by leased area.
The e-Commerce company presently operates 7 fulfillment centres and 97 warehouses in 39 cities. The company has said that it would spend between U.S.$1 billion to U.S.$1.2 billion over the next 3 years to expand fulfillment infrastructure.
Fast growing trend
The trend of leasing logistics spaces in China is accelerating. According to analysts, Global Logistic Properties saw its new and expansion leases signed increase by 74% to 1.3 million square metres for the first half of FY2015. The company’s also involved in developing new real estate, with development starts in the first half of FY2015 growing by 80% to U.S.$846 million compared to the year-earlier period.
China has great demand for up-to-date logistics facilities
Analysts point out that there is sufficient headroom for growth in the number of modern logistics facilities in China. Currently, less than 25% of China’s warehouses can meet modern logistics requirements and these legacy facilities face demolition as the urbanization of China continues. Moreover, the current supply of warehouses on a per capita basis in China is only 8.3% that of the U.S. If China continues growing its economy, demand for modern logistic facilities will increase alongside.
Nol van Fenema