[photopress:BeijingFactories.jpg,full,alignright]China’s industrial real estate market is likely to see massive growth in the coming years, driven by strong manufacturing and retail activities. This was most firmly predicated at a recent industry forum, the China Industrial Real Estate Summit. It was repeatedly stated that industrial real estate, which generally includes logistics, industrial parks and business space, is the new investment magnet in China’s real estate market.
Leonard Ng, managing director of CB Richard Ellis in Shanghai, said, ‘China’s industrial real estate market is still in its infancy. Most of the investors in the industrial real estate market and facilities are currently clustered in the country’s eastern and coastal areas. But about 800 million people are living in China’s vast central and western region where such logistics infrastructure is to be improved, which points to huge potential in this market.’
Analysts at the conference agreed that China’s logistics market, which includes freight, warehousing and distribution facilities, is set to grow massively in the coming years, driven by dynamic retail activities.
Trent Iliffe, director of global real estate money management and services at Jones Lang LaSalle said China’s logistics market is expected to grow by almost 30% a year in the next three to four years. He said the retail sector would be the biggest driver of logistics expansion. He pointed out the number of foreign retailers in China has more than tripled from 314 in 2004 to 1,000 by the end of 2006.
Zhou Jianchun, deputy director of the Institute of China Land Survey and also a member of the China Land Society, said, ‘Local governments usually auction the land designated for industrial property development at much lower prices and always set loose limits on land supply in this regard, which has made the returns on industrial property development higher than other commercial property development activities.’
Source: China View