Shanghai Logistics Warehouse Market Report - STRONG LEASING DEMAND DRIVES UP RENTAL GROWTH
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STRONG LEASING DEMAND DRIVES UP RENTAL GROWTH
Shanghai Logistics
knightfrank.com.cn
Warehouse Market Report
Q1 2021S h a n g h a i L o g i s t i c s Wa r e h o u s e M a r k e t R e p o r t Q 1 2 0 2 1
OVERVIEW AND OUTLO OK
According to the Shanghai Municipal industrial output value in Shanghai an increase in the vacancy rate in the
Statistics Bureau, GDP in Shanghai increased by 34.3% YoY to RMB337.083 short term. As the largest stock plot
reached RMB945.886 billion in Q1 billion. of transformation and upgrading in
2021, with a YoY increase of 17.6%. In Jinshan, Plot D of Phase I in Smart
Q1, the gross industrial output value In Q1, the realised foreign direct Industrial Park co-developed by NE
of large-scale industrial enterprises investment (‘the realised FDI’) China and Geely will be completed in
in Shanghai increased by 35.6% YoY achieved US$5.627 billion, an increase Jinshan Fengjing Industrial Park in
to RMB877.079 billion. Amongst, the of 20.5% YoY, with the two-year June, bringing approximately 65,000
gross industrial output value increased average growth of 12.2%. Amongst, sqm of logistics warehouse space to
by 27.8% YoY to RMB320.326 billion in the realised FDI of tertiary industry the market. Due to the limited leasable
March. increased by 21% and its value logistics warehouse space in Shanghai,
accounted for 95.3% of the total in the demand of storage space from the
In Q1, Shanghai's manufacturing Shanghai. third-party logistics and fresh food
investment increased by 26.1% YoY, e-commerce platforms will remain
with the two-year average growth of In Q2, a total of nearly 300,000 buoyant, while the logistics warehouse
18.9%. With the rapid development in sqm of logistics warehouse space is rent will continue to increase steadily.
strategic emerging industries, its gross expected to be completed, leading to
Figure 1: Shanghai logistics warehouse market indicators[1]
2021 q1 2021 Q1 2021 q1
New supply Rent Vacancy rate
1.59 10.0%
sqm RMB/sqm/day
QoQ change: QoQ change: 0.6% QoQ change: 1.0pps
Outlook (Q2 2021) : Outlook (Q2 2021) : Outlook (Q2 2021) :
Source: Knight Frank Research
[1] Rent refers to tax-included contract rent, including bonded and non-bonded warehouses
2S h a n g h a i L o g i s t i c s Wa r e h o u s e M a r k e t R e p o r t Q 1 2 0 2 1
Figure 2: Future supply of logistics warehouse in Shanghai
sqm
Baoshan
2,500,000
Pudong
2,000,000 Qingpu
Songjiang
1,500,000 Fengxian
Jinshan
1,000,000
500,000
0
2021 2022
Source: Knight Frank Research
LOGISTICS PROPERTIES
In March 2021, the China’s Logistics
Industry Sentiment Index, released Figure 3: Average rent and QoQ growth rate of logistics
by the China Logistics and Purchasing warehouse properties in Shanghai
Federation, reached 54.9%, up 5.1
percentage points from the previous RMB/sqm/day Logistics rent (left) QoQ growth rate (right) Growth rate (%)
month, while China’s Warehouse 1.8 5%
Storage Index recorded 52.7%, up 3.8 1.6
4%
percentage points MoM. Besides, the
1.4
China Manufacturing Purchasing 3%
1.2
Managers Index (PMI) bounced back
1.0 2%
by 1.3 percentage points to 52%. The
overall manufacturing sector has 0.8 1%
grown steadily while the logistics 0.6
0%
sector has still performed well with a 0.4
good prospect. 0.2
-1%
0.0 -2%
In Q1, boosted by the strong demand, Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1
the average rent in Shanghai’s logistics 2013 2014 2015 2016 2017 2018 2019 2020 2021
warehouse market has rebounded
significantly at RMB1.59 per sqm Source: Knight Frank Research
per day, with a QoQ increase of
0.6%. Amongst, the rent in bonded
warehouses remained at RMB1.4 per
sqm per day while the one in non- QoQ to 10%. The limited supply of continuously active, of which the
bonded warehouses increased by 1.8% warehouses in Shanghai led to the leasing demand from the third-
QoQ to RMB1.67 per sqm per day. overflow of logistics and warehousing party logistics companies remained
demand, promoting the development strong. In Q1, tenants from third
On the supply side, owing to the of logistics properties in satellite cities party logistics sector leased 8,000
delays in project completions, there surrounding Shanghai. sqm and 12,000 sqm of warehouse
was no new project completed in Q1, space respectively in ESR Shanghai
leading to the decrease in the overall Despite this, the Shanghai logistics PVG Logistics Park and ESR Shanghai
vacancy rate, down 1 percentage point warehouse leasing market has been Qingpu Baihe Logistics Park.
3S h a n g h a i L o g i s t i c s Wa r e h o u s e M a r k e t R e p o r t Q 1 2 0 2 1
SALES AND INVESTMENT
During the COVID-19 pandemic, with On 26 February, Metcold, a leading of US$50 million. Metcold Shanghai
the domestic economy experiencing a food cold chain infrastructure service Qingpu Project, located in Qingpu
continuous growth, investors are now provider, announced its cooperation Liantang Industrial Park, is scheduled
focusing on China’s logistics property with Metropolitan Real Estate, a for completion at the end of 2022. It has
market. As the cold chain logistics global real estate indirect investment a land area of 56 Mu and a total GFA of
has become a new source of demand, management company. Metropolitan approximately 40,000 sqm. The volume
investors grow to pay more attention Real Estate will invest on Metcold of cold storage space has reached more
on high-standard cold chain logistics opportunity fund phase I and II, and than 400,000 cum, approximately
warehouses, thus it is now a new jointly develop Metcold Shanghai Qingpu 128,000 cum of which are for automated
investment hotspot. Project, involving a total investment three-dimensional cold storage space.
LAND MARKET
In Q1, the primary industrial land market
in Shanghai remained active and the Figure 4: Transacted area of primary industrial land
total transaction volume has gradually by district, Q1 2021
picked up. A total of 28 industrial
sites were transacted, doubling the
Minhang
volume compared with the previous 1%
8%
quarter. It involved a total land area 3%
2%
Jinshan
of approximately 1.41 million sqm, up
78% QoQ. The districts with the highest 6%
Pudong
transaction volume were Minhang and
Pudong, with an area of 0.49 million 35%
sqm and 0.4 million sqm respectively, Songjiang
accounting for 35% and 28% of the total
transaction areas in Shanghai. Putuo
Besides, a total of ten warehousing Fengxian 28%
land plots have been sold in Shanghai,
involving a total land area of Jiading
approximately 660,000 sqm. Five of the 17%
total are located in Lingang New Area of Qingpu
Pudong with a total land area of 450,000
sqm, mostly acquired by cold chain
logistics companies. Source: Shanghai Planning and Land Resource Bureau, Knight Frank Research
In terms of the number of transactions,
Pudong District, mainly concentrated Figure 5: Primary industrial land price by district, Q1 2021
in Lingang, ranked first. In Q1, Lingang
New Area sold 13 plots, accounting for million RMB/Mu
34% of the total in Shanghai. Shanghai
10.0
Lingang New Area Aviation Industrial
Development Company Limited,
a subsidiary of Shanghai Lingang, 8.0
acquired an industrial land plot for
RMB170 million. Covering a land area 6.0
of 116,000 sqm, the plot is mainly used
for the construction of Lingang Aviation
4.0
Industrial Park, in line with the industrial
planning for large aircraft in the southern
area of Pudong Airport. 2.0
In terms of sales price, Putuo District
0.0
recorded the highest average industrial
Putuo Qingpu Minhang Pudong Jinshan Songjiang Jiading Fengxian
land price in Q1, reaching RMB8.88
million per mu. Acquired by Shanghai
Push Medical Device Technology Source: Shanghai Planning and Land Resource Bureau, Knight Frank Research
Company Limited, the plot is located
in Futurity Hi-Tech Logistics Park with
a plot ratio of 2.62 and the land tenure second place with a unit price of RMB1.27 relatively low, recording RMB580,000
of 50 years. Qingpu District secured the million per mu. Fengxian’s land price was per mu.
4S h a n g h a i L o g i s t i c s Wa r e h o u s e M a r k e t R e p o r t Q 1 2 0 2 1
SHANGHAI’S LOGISTICS WAREHOUSE
RENTS BY DISTRICT
High
1.7 - 1.9 1.7 - 1.8
1.3 - 1.4
RENT
Baoshan
Jiading
Low
1.8 - 2.0
1.7 - 1.9
1.7- 1.8 1.4 - 1.6
Putuo
Qingpu 1.8 - 2.0 Pudong
Minhang
1.7 - 1.8
Songjiang 1.4 - 1.6
1.4- 1.5 1.2 - 1.4
Pudong Lingang
Fengxian
Total Inventory:
1.4 - 1.6
8.05
Jinshan million sqm
Source: Knight Frank Research
Note: rents using tax-included contract rent at RMB/sqm/day; red refers to rents of bonded warehouses while black refers to rents of non-bonded warehouses; the arrow
refers to the QoQ growth rate of logistics warehouse rents by district
5We like questions, if you’ve got one about our research, or would like some property advice,
we would love to hear from you.
Research & Consultancy Industrial Services
Laurence Zhu Regina Yang Ying Shin Lee
Senior Director, Strategic Advisory, Director, Head of Research & Consultancy, Managing Director,
China Shanghai & Beijing Shanghai
+86 137 6439 9991 +86 21 6032 1728 +86 21 6032 1719
laurence.zhu@cn.knightfrank.com regina.yang@cn.knightfrank.com ying.lee@cn.knightfrank.com
Martin Wong Evan Xu Will Zheng
Director, Head of Research & Consultancy, Analyst, Research & Consultancy, Senior Director,Industrial& Logistics,
Greater China Shanghai China
+852 2846 7184 +86 21 6032 1729 +86 21 6032 1788
martin.wong@hk.knightfrank.com evan.xu@cn.knightfrank.com will.zheng@cn.knightfrank.com
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