On december 20th, a world-renowned private real estate consulting firm, le fong, published the shanghai industrial market report for the third quarter of 2018. The report notes that the third quarter was a traditional off-season in the industrial real estate market, that the growth of macro-indicators had slowed down and the level of rent for logistics property and industrial plants had remained largely stable and had not increased significantly. In the present report, ljf conducted an analysis and evaluation of logistics storage in shanghai, supply and demand at the plant, rent trends and the industrial land market。
According to data on the logistics operations of the chinese logistics and purchasing federation, in the first three quarters, total social logistics stood at $204. 1 trillion, representing an increase of 6. 7 per cent over the previous six months, a decline of 0. 2 percentage points over the same period last year. China's logistics industry performance index averaged 51. 6 per cent in the third quarter, down 2. 3 percentage points from the average for the first half of the year。
The senior deputy director of the department of industrial services of shanghai, lai, has indicated that the third quarter is usually a low season for logistics transactions, that government approval of logistics projects is stricter, that developers and investors can develop logistics projects only by acquiring second-hand industrial land, and that the registration and taxation requirements of logistics projects are stricter, resulting in some potential tenants having to maintain a wait-and-see attitude or choose to rent warehouses outside shanghai.” as a result, the rent for storage property in shanghai logistics in the third quarter remained at rmb 1. 55 per square metre per day, the same as in the previous quarter, and the vacancy rate in logistics warehouses remained at 8 per cent.”
According to the report, the three quarters were generally off-seasons in the industrial plant market, so the average rent ratio for single-story industrial plants in shanghai remained unchanged at $1. 22 per day. On a regional basis, the highest rents for industrial plant buildings are in qin and pudong, with daily rents of $1. 49 and $1. 35 per square metre, respectively. The third and fourth places are qingura and bong-hyun, respectively, with a daily rental rate of $1. 28 and $1. 26 per square metre. In the golden hills, the rental rate is relatively low, at approximately $1. 0 per square metre per day。
The report also shows that, in the third quarter, the shanghai industrial land level market was dynamic, with 23 industrial land being traded, with a combined yield of 959,000 square metres and a decline of 4. 2 per cent and 16. 5 per cent, respectively, in terms of the number of plots and area of concessions. The bulk of the settlements are concentrated in pudong and song river districts, with pudong having a long lead area of 385,000 square metres and the second largest area of 174,000 square metres。
The director of the board of directors and the head of the research and consulting department in shanghai said, “in view of the scarcity of land resources, we expect that the rental of logistics storage will continue to rise steadily in the coming year, with around 3 to 4 per cent around the ring; the rental of industrial plants will continue to rise, with an increase of around 2 to 3 per cent. With the completion of several logistics warehouses in the fourth quarter, the vacancy rate for logistics warehousing will increase slightly to 9 per cent.”
