4. LOGISTICS PARK MARKET OVERVIEW 4.1. CHINA As of 2023, China’s average Grade A logistics occupancy rate declined by 1.7% to 80.6%. Average Grade A logistics rents recorded RMB29.70 psm pm, a decline of 2.0% yoy. Logistics Trends Fuelled by the growing number and scale of e-commerce platforms, e-commerce is a huge driver of growth in China’s logistics industry, giving rise to a growing demand for third-party logistics services and cold chain facilities. Logistics players tapped onto digitalisation to improve their competitive edge and operational efficiency, smart logistics and warehouses will be increasingly prominent and be in high demand. Global trade tensions and China’s zero-COVID policies have prompted companies to reassess and diversify their supply chain networks including the adoption of the China Plus One strategy, where China is the key supply source and other countries serving as diversification grounds. While companies have shifted parts of their supply chain to alternative grounds, China’s role in the global manufacturing and supply chain network remains pivotal and logistics will continue to be a crucial asset to domestic and international firms alike. 4.2. SHANGHAI Existing and Potential Supply As of 2023, Shanghai’s total Grade A logistics stock stood at 8.6 million sq m, up 4.9% yoy. The total net new supply in 2023 was estimated to be about 0.4 million sq m. Completions included ESR Qingpu Yurun Park Phase 1 of about 288,600 sq m. Approximately 1.8 million sq m of Grade A logistics space is expected to be delivered across Shanghai in 2024. Total Grade A logistics stock is expected to reach near 10.5 million sq m in 2024. SHANGHAI MAJOR GRADE A LOGISTICS POTENTIAL SUPPLY IN 2024 Project Supply (sq m) GLP Zhichuang Industrial Park 125,000 ESR Qingpu Yurun Park Phase 2 176,822 DNE Jinshan Galaxy Park Phase 3 600,000 GLP Shanghai Lingang Lengjing Park 199,224 GLP Shanghai Lingang International Logistics Park J 147,226 Mapletree Fengxian Industry Park 121,728 LOGOS Shanghai Songjiang Logistics Park 75,947 ESR Qingpu Yi'nu Industrial and Logistics Park 102,000 Marvel Capital Shanghai Fengxian Logistics Park 85,500 Brookfield Shanghai Lingang Logistics Park 193,000 Source: Colliers International Consultancy & Valuation (Singapore) Pte Ltd Demand and Occupancy Over the past five years, the average gross absorption of Grade A logistics space in Shanghai stood near 275,000 sq m per year. As of 2023, the average gross absorption recorded was about 34,400 sq m and the Grade A logistics occupancy rate declined by 3.6% to 82.0%. With the decline in manufacturing and consumer demand, overall logistics demand was relatively muted in the year. ANNUAL REPORT 2023 71 Financials Framework Portfolio Performance Leadership Overview
RkJQdWJsaXNoZXIy NTkwNzg=