Research Report: crack the investment password of logistics facilities in nine mainland cities in Guangdong, Hong Kong, Macao and Dawan District
Source /cbre cbre_china
Driven by the strong demand growth, the vacancy rates of the core logistics markets in the nine inland cities and the high-standard warehouse markets in the emerging logistics markets in Dawan district are mostly at historically low levels. Investment trading has become the mainstream of bulk trading in the bay area logistics market.
The total GDP of Guangdong, Hong Kong and Macao Greater Bay area has ranked among the top three Bay areas in the world. The sound economic development momentum, steadily rising consumption, the continuous release of favorable policies and export-oriented economy jointly promote the continuous development of the logistics facilities market in the bay area, the continuous blooming of market vitality, the low vacancy rate for a long time and the stable growth of rent. Benefiting from this, the investment market of logistics facilities in Guangdong Hong Kong Macao Great Bay area has been rapidly warming up in recent years, and the investment heat has been rising.
CBRE CBRE Richard Ellis focuses on the nine mainland cities in Guangdong, Hong Kong, Macao and the Great Bay area. Through quantitative and qualitative analysis of the six related factors affecting the investment in logistics facilities (economic development potential, transportation facilities advantages, logistics facilities supply, demand, rental performance and investment market heat), CBRE carries out star rating on different factors of each city, and then obtains the overall evaluation of its investment, Finally, it describes the three echelon distribution of logistics facilities investment in the nine inland cities of Guangdong, Hong Kong, Macao and the specific investment area, investment target and investment type strategy of each city for investors. The overall results are as follows:
The first echelon of investment
In Shenzhen, Guangzhou and Dongguan, the investment scope covers the whole city. The investment strategy focuses on the transfer of stock projects and urban renewal projects.
Investment in the second echelon
Foshan, Huizhou and Zhongshan, the investment scope is the agglomeration area of key logistics parks in the city. The investment strategy is mainly based on stock properties and focuses on a small number of green space development opportunities.
Investment in the third echelon
Jiangmen, Zhaoqing and Zhuhai, the investment scope is mainly the agglomeration area of the property Park, and the investment strategy is mainly green space development.
The detailed investment strategies of each city are detailed in the article. With a view to the future, the logistics market in Guangdong Hong Kong Macao Bay area will maintain a good development momentum in the medium and long term, thus bringing more investment opportunities due to the formation of e-commerce consumption habits under the influence of the epidemic and the continuous recovery of import and export demand.
01
Strong economic development has brought about strong logistics demand, and the average and per capita GDP of Guangdong, Hong Kong and Macao Greater Bay area ranks first in the urban agglomeration.
According to the Research Report on the interactive relationship between regional logistics and regional economic growth of Beijing Jiaotong University, the economic development level of each region is highly consistent with the logistics development level. The higher the economic development level, the higher the logistics development level. Large volume and high-intensity GDP will bring frequent and fast-growing logistics demand. From the comparison of major urban agglomerations in China, Guangdong, Hong Kong, Macao and the nine mainland cities have obvious advantages in the intensity of economic development.
As the third largest Bay Area in the world, the total GDP of Guangdong Hong Kong Macao Bay Area in 2020 has exceeded that of Canada, the world's tenth largest economy, and the average and per capita GDP ranks first in China. Among them, the import and export trade volume of the nine inland cities in the bay area leads the country, and the total retail sales of social consumer goods is equal to that of Beijing, Tianjin and Hebei. Strong economic development has brought about strong logistics demand. The freight and passenger traffic volume of the bay area far exceeds that of other Bay areas in the world. The freight volume of the nine mainland cities ranks second in the national urban agglomeration.
The GDP of the four cities exceeded trillion, and their economic performance was eye-catching:
In 2021, Shenzhen's GDP has exceeded RMB 3trillion, ranking the third in China and Guangzhou's 2.8 trillion, ranking the fourth. Both Foshan and Chongyang have entered the list of 24 trillion GDP cities in China. As two prefecture level cities, their economic development has been comparable or even surpassed that of some domestic provincial capitals.
The annual GDP growth rate of Guangzhou and Shenzhen during the 14th Five Year Plan period was 6%, both exceeding the growth rate of about 5% in first tier cities Beijing and Shanghai. The major cities in Guangdong, Hong Kong and Macao Great Bay area, which focus on science and technology and advanced manufacturing, are expected to maintain a certain economic development and have a high probability of achieving the predetermined goal.
The net inflow of population grew rapidly and the consumption capacity remained strong:
In 2021, the total retail sales of social consumer goods in the nine inland cities of the bay area was about 3.4 trillion yuan, 7.1% higher than the total retail sales of social consumer goods in Beijing, Tianjin and Hebei. Guangzhou and Shenzhen rank fourth and fifth in the national ranking of social consumer goods, and are the main sources of total social consumption in the bay area. In 2021, the total retail sales of social consumer goods in Guangzhou exceeded the trillion mark for the first time. The annual growth rate of the total retail sales of social consumer goods in the nine inland cities of the Bay Area in 2021 was higher than 8.0%.
Comparing the results of the seventh and sixth censuses, Shenzhen and Guangzhou, the two core cities of the nine mainland cities in Guangdong, Hong Kong, Macao and the Greater Bay area, ranked first and third in China in terms of population growth. The population growth in the past ten years was 7.2022 million and 5.9758 million respectively, up 68.46% and 47.05%, while the population growth in Dongguan in the past ten years also exceeded 2million, ranking among cities with a population of more than 10 million. The overall population growth of the nine inland cities in the bay area increased by 8.04%, and the huge population and increment strongly promoted the growth of consumption.
02
New East-West channel brings new opportunities for logistics market
The development of logistics market and transportation facilities in the Bay Area complement each other. The development history of logistics market in the bay area is the development history of transportation facilities in the bay area.
The logistics market in the bay area began to develop outward with the two first tier cities of Guangzhou and Shenzhen as the core. As the first tier cities in China and the core cities in the Pearl River Delta, Guangzhou and Shenzhen have derived huge logistics demand relying on the leading industrial development and the continuous expansion of population scale. With the development of the city, there is a serious shortage of land resources, and the logistics demand gradually overflows to the surrounding cities, extending from the east to the West Bank.
Because of the strong dependence of logistics transportation on traffic, the logistics development path of the bay area has been continuously developed along the G4 Expressway → the inner ring line of the Pearl River Delta → the outer ring line of the Pearl River Delta, thus spreading all over the mainland cities of Guangdong, Hong Kong, Macao and the Greater Bay area. In addition, the overall logistics market in the bay area is in short supply, prompting logistics operators to include Qingyuan in the scope of site selection.
According to the development degree of each logistics market, the bay area logistics market can be divided into core logistics markets, including Guangzhou, Shenzhen, Dongguan and Foshan, and emerging markets, including Huizhou, Zhongshan, Jiangmen, Zhaoqing and Zhuhai.
With the continuous development of the logistics market in the bay area, the West Bank cities have gradually attracted many logistics developers and operators by virtue of broader hinterland resources and more cost-effective land acquisition costs.
In recent years, the traffic connectivity between the East and West banks of the Pearl River Delta has been continuously strengthened. The Hong Kong Zhuhai Macao Bridge and Nansha bridge, which were opened in 2018 and 2019 respectively, have effectively improved the convenience of traffic between the East and West banks and driven the continuous expansion of logistics demand from East to west. In the future, with the opening of new traffic channels on the East and West banks and the completion of new airports, new logistics development opportunities will be brought.
03
High standard warehouse market in short supply and stable rise in rent
Compared with Beishang and its surrounding areas, the logistics supply of Guangshen and its surrounding areas is relatively small, and the overall supply is in short supply. The coordinated development of industries dominated by manufacturing among cities has driven up the demand for internal industrial products and mechanical equipment logistics. In addition, the demand for import and export, e-commerce and third-party logistics has increased, and the market vacancy rate has continued to improve under the pressure of increasing new supply year by year, The vacancy rate in the core logistics markets and emerging logistics markets of the nine inland cities in the bay area is mostly at a historical low of 3%-5%. With an eye to the next three years, the future supply of high-standard warehouse market in the bay area has not seen a large-scale increase. It is expected that the overall market supply is still in short supply, and the annual average rent growth will maintain a high level of 4%-5%.
As one of the regions with the highest degree of openness and the strongest economic vitality in China, the logistics real estate development of the nine inland cities in Guangdong, Hong Kong, Macao and Dawan district has unique congenital advantages. At present, 11% of the non bonded high-standard logistics properties in China are concentrated in the nine inland cities of Guangdong, Hong Kong and Macao Dawan district.
Inventory of major logistics markets in mainland cities of Dawan District:
According to the statistics of Jones Lang LaSalle's appraisal and consulting service department, the non bonded high-level inventory of the nine mainland cities in Guangdong, Hong Kong, Macao and Dawan district is mainly concentrated in Guangzhou, Foshan and Dongguan. By the first quarter of 2021, the non bonded high-level inventory in Guangzhou, Foshan and Dongguan had exceeded 2million square meters, and the sum of the three cities' inventory exceeded 3/4 of the total of the nine mainland cities in Dawan district; However, due to the scarcity of land resources in Shenzhen, the spillover demand drives the stock of neighboring cities Dongguan and Huizhou. The stock within Shenzhen is less than 1/6 of the total of the above two cities.
Rent of major logistics markets in mainland cities of Dawan District:
Among the mainland cities in Dawan District, Shenzhen, which is short of land, has the highest rent, with a median rent of 1.65 yuan / square meter / day, followed by Guangzhou, which is also the core city, with a median rent of 1.31 yuan / square meter / day. Driven by stable manufacturing demand and spillover demand from surrounding core cities, the median rent of Foshan, Dongguan, Zhongshan and other manufacturing towns also exceeded 1 yuan / square meter / day.
04
The investment in logistics facilities in the bay area is becoming more and more popular
Besides Shanghai and its surrounding areas, Guangzhou, Shenzhen and its surrounding areas are becoming the most important areas for investors. In recent years, the volume of block transactions in the surrounding cities of Guangzhou and Shenzhen has entered a rapid growth channel. Driven by the strong demand, the logistics and storage facilities of the nature of industrial land have also been brought into the vision of investors. Investment trading has surpassed self use trading and become the mainstream of bulk trading in the nine mainland cities in Guangdong, Hong Kong, Macao and the bay area, accounting for 59.0% in the past four years. About 80% of the buyers of the transaction come from real estate funds, enterprises and developers. According to the city statistics, Dongguan is favored by the majority of investors because of its logistics facilities stock and rental performance comparable to those of the first tier cities, as well as its location advantage of effectively radiating Guangzhou and Shenzhen.
In 2021, the stock of high-standard warehouses in the nine inland cities in the bay area will be nearly 13million square meters:
From the supply side, the inventory of high-standard warehouses in the core logistics areas of China's three major urban agglomerations (Beijing Tianjin Hebei, Yangtze River Delta and Dawan District) is basically the same, all located at about 10million square meters, of which the vacancy rate in Shenzhen, Dongguan, Guangzhou and Foshan is the lowest, only 4.3%. Driven by the strong logistics demand, the area of high-standard warehouses in Guangzhou, Shenzhen, Foshan and Dongguan has exceeded 2million square meters, which is the main supply source of high-standard warehouses in the nine mainland cities in the bay area.
With the geographical advantage of being bordered by all the top three cities, Guangzhou, Shenzhen and Dongguan, Huizhou's high-standard warehouse market has developed rapidly in recent years, and the current supply volume is more than one million square meters.
The stock of high-standard warehouses in Shenzhen, Dongguan and Guangzhou and Foshan accounts for 83% of the total stock of the nine mainland cities in the bay area.
The total amount of new supply will increase in the next three years, but the distribution is uneven; The proportion of emerging regions increased slightly:
In the next three years, it is estimated that a total of 4.16 million square meters of new supply will be added to the high-standard warehouses in the nine mainland cities in the bay area, an increase of 35% over the past three years. Guangzhou and Dongguan accounted for nearly 60% of the total new supply, and Huizhou continued to supply in large quantities. However, the supply in Shenzhen is still extremely scarce, and Foshan also has a significant decline.
New supply is still concentrated in core regions, but the proportion of emerging regions has increased slightly from 28% in the past three years to 31%.
E-commerce and 3PL demand covers all cities, and import and export demand is mainly distributed in Guangzhou, Shenzhen and Dongguan:
Different cities have different types of logistics demand due to their different leading industries, development status, geographical location, ports, airports and other transportation facilities. However, the high degree of Industrial Synergy among cities and the overflow of logistics demand from core cities make the logistics demand of each city have certain commonalities. In the whole bay area, e-commerce and third-party logistics functions span multiple cities.
Focusing on the total demand of the stock market, Guangzhou, Shenzhen, Foshan and Dongguan have high demand for logistics, and the demand for all kinds of logistics is high. As a first tier city, Guangzhou and Shenzhen have a better overall scale of logistics demand. As the provincial capital and a logistics hub linking many cities on the West Bank, Guangzhou's logistics demand comes from e-commerce (including cross-border e-commerce) and third-party logistics. In addition, some of it comes from the manufacturing industry including clothing and pharmaceutical projects. Shenzhen is located in Yantian port, the fourth largest port in the world. In addition, it also has a number of small and medium-sized ports. The import and export demand is the first demand of the city's logistics demand. More than 80% of the city's high-standard warehouse stocks are bonded warehouses. Foshan and Dongguan, as the cities that directly undertake the spillover of logistics demand from Guangzhou and Shenzhen, are second only to the two first tier cities in terms of logistics demand intensity.
The demand scale of Huizhou and Zhongshan is at the middle level. Huizhou's electronic information technology product manufacturing industry drives a large demand for urban manufacturing. In addition, the logistics demand overflow from Guangzhou and Shenzhen also drives the growth of e-commerce and third-party logistics demand.
The total demand of Zhaoqing and Jiangmen is relatively small. The main demand of Zhaoqing and Jiangmen on the West Bank of the Pearl River Estuary comes from cross-border e-commerce and domestic e-commerce.
The coordinated development of manufacturing based industries among cities drives the vigorous development of logistics demand for industrial products:
Developed manufacturing clusters and a high degree of synergy are another important factor in shaping the logistics demand structure of the nine inland cities in the bay area. Through the analysis of high-standard warehouse leasing transactions tracked by CBRE in the past five years, we found that manufacturing tenants accounted for 17% of the warehouse leasing area in the nine inland cities in the bay area, ranking first among all regions in China.
The demand for logistics of various industrial products such as electronic equipment and auto parts is booming, and the industrial chain coordination and import and export convenience further stimulate the rapid development of supply chain logistics, cross-border e-commerce and other industries based on manufacturing industry. Over the past two years, Xiyin's rent expansion in Guangzhou, Foshan, Zhaoqing, Jiangmen and other places of more than one million square meters is a typical case of the Bay Area's supply chain advantage driving the demand for logistics and warehousing.
Multi cities carry the regional distribution function, demand spillover and organic division of labor and cooperation inject infinite vitality into the development of the Bay Area Logistics Market:
05
Bay Area Logistics rent
The intensity of economic activities and the distribution of important infrastructure determine the rent gradient.
When the supply of high-level warehouses in most regions exceeds the demand, the intensity of economic activities, the distribution of ports and airports and other important infrastructure are important factors affecting the rent gradient of high-level warehouses in the region.
Overall, the rent on the East Bank of the Pearl River Estuary was 17.1% higher than that on the West Bank in 2021, up 1.3 percentage points year-on-year, and the rent growth rate was faster than that on the West Bank. As the most active economic center and the most important import and export port in the region, Shenzhen is close to Hong Kong, which is the most expensive in terms of logistics rent in the world. Driven by the serious shortage of supply, Shenzhen ranks first in terms of rent level and radiates and drives Dongguan and Huizhou.
As the most advanced area in the country's urbanization, Guangfo is located in the regional center, and the warehouse supply is deeper than that of Dongguan. The rent level of high-standard warehouses in the two places is gradually approaching, and the rent in Zhongshan is driven up by the spillover demand.
Zhaoqing and Jiangmen, which are geographically far away from the economic center of the bay area, and Zhuhai, which has only one logistics project, have the third echelon of rent, and the monthly rent is between 25-32 yuan per square meter.
In the next three years, the average annual growth rate of the overall rent of high-standard warehouses in the nine mainland cities in the bay area is expected to reach 3-5%.
In the past three years, the average rent of high-standard warehouses in the nine inland cities in the bay area has achieved an average annual increase of 33%, leading other major regions in the country. In terms of specific cities, the rent growth rate of Shenzhen, Foshan, Dongguan, Huizhou and Jiangmen in recent three years has exceeded 4.0%
In the next three years, the supply of high-standard warehouses in the region will increase. However, in view of the previous continuous situation of short supply, it is expected that the warehouse rent in most cities will maintain an average annual growth of 3-5%.
Bay area logistics the bulk logistics transactions of the nine mainland cities in the bay area have entered a rapid growth channel.
Since the outbreak of the COVID-19, the bulk transaction volume of logistics real estate in the nine mainland cities of Guangdong, Hong Kong, Macao and Dawan district has increased rapidly. However, from the perspective of horizontal comparison of urban agglomeration, the overall scale is still relatively low compared with Beijing, Tianjin, Hebei and the Yangtze River Delta. In the two years after the outbreak, the average annual volume of bulk logistics transactions in Beijing, Tianjin, Hebei and the Yangtze River Delta was about 13billion yuan and 14billion yuan respectively, and the transaction size of the nine mainland cities in the bay area was only half of that. An important reason for the low transaction activity is that there are few investment opportunities; In view of this, in recent years, many investors have begun to bring the logistics facilities of industrial land into their vision.
Within the region, Guangzhou, as a first tier city, has relatively more opportunities for investment projects, and the logistics block trading market is the most active. The average annual trading volume in the two years after the epidemic was more than 3billion yuan. The most important trading case was Blackstone's acquisition of R & F Airport Logistics Park. Compared with Shenzhen, another first tier city, due to the scarcity of projects available for sale, Investors then focused on the acquisition opportunities in Dongguan and Huizhou, which benefited from the most significant spillover of logistics demand in Shenzhen.
The launch of domestic public offering REITs has brought good capital exit channels, making new infrastructure properties of logistics more favored by investors, and will speed up the transaction of such properties in the future.
Investment transactions have become the mainstream of the market, and 80% of transactions are purchased by real estate funds, enterprises and developers.
Throughout the investment purpose of block transactions in the past four years, the self use purchase and investment demand of logistics real estate in the region are active. As the two first tier cities in the bay area, Guangzhou and Shenzhen have been investment oriented in bulk logistics and warehousing transactions in the past four years. The magnitude of logistics demand and the scarcity of marketable projects in first tier cities make investors flocking to these two markets.
In terms of investor composition, real estate funds, general enterprises and developers are the three major investors in the nine inland logistics block trading markets in the bay area, accounting for about 80% of the total in four years.
In 2021, lingzhan purchased 75% of the rights and interests of the two distribution centers in Dongguan and Foshan for 750million yuan, which is the first time lingzhan has laid out domestic logistics real estate. It also further shows that REITs and other institutional capital are optimistic about the logistics real estate in the bay area for a long time.
Guangzhou Shenzhen metropolitan area will continue to attract the attention of logistics facility investors.
According to the cbre2021 survey report on China's warehousing and logistics tenants, thanks to the huge population consumption scale and efficient logistics and transportation efficiency in the first tier cities and surrounding areas, the first tier cities and surrounding areas are still the first expansion areas for tenants, and the expansion willingness of tenants in the two metropolitan areas in the bay area leads the country: 40.0% of the surveyed tenants said that they would expand in Guangfo in the next three years, The proportion of tenants planning to expand in Shenzhen Dongguan area is as high as 43.0%.
Strong rental demand, coupled with the current extremely low vacancy rate, will make the logistics and warehousing opportunities in Guangzhou Shenzhen metropolitan area attract the attention of many investors.
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Investment strategy suggestions
Description of rating criteria for investment echelon of logistics facilities in nine mainland cities in Guangdong, Hong Kong, Macao and Dawan District:
CBRE has analyzed and rated the six key factors that affect the investment decision-making of logistics facilities in the nine inland cities of Guangdong, Hong Kong, Macao and the Greater Bay area, namely, macro-economy, development advantages of transportation facilities, supply side performance, demand performance, rent performance and investment market conditions. From this, a comprehensive investment gradient rating is obtained, and finally three investment echelons of the logistics facilities market in the bay area are divided.
1、 Short supply is the norm of Shenzhen Logistics Market
"One warehouse is hard to find" leads to many large-scale logistics demands spilling over to surrounding cities. The excess of demand over supply has also pushed up the rents of the high-standard warehouse market in Shenzhen. The rent level ranks first among the nine mainland cities in the bay area. By the end of 2021, the average monthly rent has exceeded 45 yuan, and the market is almost full. The overall supply is limited. Driven by the rapid population inflow and favorable policies, the steady growth of logistics demand will keep the city's logistics warehousing facilities projects at a high occupancy rate and realize the general rise of rents. Therefore, investors can pay attention to the investable logistics and warehousing facilities in Shenzhen.
Shenzhen's land resources are extremely scarce, so the logistics and warehousing market is different from other cities in China. First of all, building warehouses and high-standard warehouses have become the main force of market supply, each accounting for half of the market supply, and both types of markets have maintained low vacancy rates of 0.4% and 2.5% by the end of 2021. From the perspective of rent growth, it shows a trend of both growth. The difference between the two rent levels is small, which also reflects the strong demand of Shenzhen logistics market. Secondly, bonded warehouse is the mainstream of high-standard warehouse supply, accounting for 77.6%, while non bonded warehouse accounts for only 22.4%, which is quite different from the dominant non bonded warehouse in other cities in China.
Thanks to the unique advantage of being adjacent to Hong Kong and having Yantian port, the world's largest single stone spitting port, the import and export trade has always been firmly in the forefront of the country. As an important gateway city at home and abroad, with a series of attractive preferential policies continuously launched in recent years, including Shenzhen's leading demonstration zone, international creative city and Shenzhen Hong Kong modern service industry cooperation zone, the import and export trade demand will continue to grow, and drive the long-term stable and good development of Shenzhen bonded warehousing and logistics facilities. As for non bonded high-standard warehouses, due to the scarcity of overall supply and the rapid growth from ordinary e-commerce and third-party logistics, the rent growth will be more positive. Therefore, both bonded warehouse and non bonded warehouse should be focused.
The GDP of Shenzhen ranks the third in China, but its area is only 1/8 of that of Beijing and 1/3 of that of Guangzhou and Shanghai. In the case of extremely scarce land resources, the government encourages intensive land development. The new transfer of industrial land focuses on positioning new industrial land and the direction of technology and high-end manufacturing sub industries, while logistics land is rarely transferred due to its low plot ratio. Moreover, the government has strict requirements on the building form, output tax and self use proportion of logistics storage facilities. The new project is mainly for self use and can only be rented for 20%, and the tenant access must be upstream and downstream of the industry, and the rent can not be higher than 50% of the surrounding market. At the same time, industrial projects are scarce through urban renewal and construction. Therefore, investors should pay attention to the transfer of stock projects with strong supervision and transformation projects with long renewal cycle in the market with an enterprising vision, and timely capture investment opportunities.
2、 Guangzhou rent increases steadily
In 2021, the city's rent increased by 3.9% year-on-year, and the overall market vacancy rate fell to a low of 4.0%. The total resident population ranking first in the bay area and its role as an international trade center have promoted the strong growth of logistics demand.
Favorable policies will further promote the continuous improvement of the logistics market. In 2021, the 14th five year plan for the integrated development of transportation and logistics in Guangzhou and several measures for Guangzhou to accurately support the high-quality development of modern logistics were issued. In the future, Guangzhou will be built into an international logistics center with global influence and a supply chain organization center in the Asia Pacific region, and a special fund for logistics development will be established, Encourage the active introduction of large-scale international and domestic leading enterprises in modern logistics and supply chain, and give financial incentives ranging from 5million yuan to 50million yuan to newly introduced enterprises.
Therefore, although the new supply of high-standard warehouses in Guangzhou will exceed one million square meters in the next three years, they are all located in the original logistics blank area. Driven by favorable policies and sustained demand growth, it is expected that the average rent in the city will still maintain a stable growth. The good development of the market will drive the good performance of high-standard warehouse properties in the whole city, so investors can focus on the whole city.
From the perspective of investment cycle, Conghua area in the north of Guangzhou is mostly high-grade warehouses in xinluocheng, and the traffic accessibility is being further improved. Therefore, Conghua area can be used as an investment area for investors to pay attention to in the medium and long term. In the short term, Nansha, Zengcheng and Baiyun, which are more mature, are better choices.
In terms of investment targets, the historical average rent of bonded warehouse and non bonded warehouse properties kept rising steadily. Bonded warehouse properties are mainly distributed in Baiyun and Nansha, while non bonded warehouse properties are mainly distributed in Huangpu and Zengcheng. These sectors are the logistics sectors vigorously developed by the government. With the continuous upgrading of the transportation network and the continuous growth of logistics demand, it is expected that the rents of the two markets will maintain a stable growth, so investors can look at both.
From the perspective of investment type, Huangpu District, as the most developed logistics area, some old projects are expected to be upgraded in the future. Therefore, from the perspective of the whole city, projects including urban renewal, stock projects and future supply can be taken into account for investment, and investment decisions can be made at any time by paying attention to marketable projects with reasonable prices.
3、 Dongguan logistics market has experienced a market trend of continuous supply in recent years
Drive the average rent to achieve an average annual growth of 4%-5%. By 2021, the rent has ranked second among the nine mainland cities in the bay area. The monthly rent is 43.67 yuan per square meter, which is almost the same as that in Shenzhen. The vacancy rate has dropped to a low of 2.0%. The overall market has been in short supply. The strong demand growth is mainly driven by the following aspects:
Dongguan has a superior geographical location, which can effectively undertake the spillover of regional distribution logistics demand from the two first tier cities of Shenzhen and Guangzhou. The developed manufacturing industries in the city, such as electronic information manufacturing, electrical machinery and equipment manufacturing, and textile, clothing and shoes, have derived a considerable part of the manufacturing logistics demand. The huge resident population drives the consumption demand. In 2021, the resident population of Dongguan also exceeded 10million for the first time, becoming the third most populous city in the bay area.
In the next three years, Dongguan's new supply will be about 1448000 square meters, but it will only increase by 4.6% compared with the past three years. The opening of Nansha bridge and Shenzhen Maoming highway and railway dual-purpose bridge will drive Dongguan to undertake more East-West logistics connectivity, and the function of the transfer center will be continuously strengthened.
According to the 14th five year plan, Dongwan will accelerate the promotion of cross-border e-commerce logistics in the future. Driven by multiple demand growth, it is expected that the market vacancy rate will remain low and the rent will continue to grow. Investors can pay attention to the high-standard warehouse properties in Dongguan.
Dongguan non bonded high-standard warehouses occupy the absolute mainstream, accounting for 95.0%. In the past four years, the rent growth rate has remained at an average annual high level of 4.0%-5.0%. In the market where supply exceeds demand, the marketable projects of such properties are good investment targets.
In terms of investment types, the market stock of Dongguan market will reach 4million in the next three years. However, in view of the growing diversified demand, it is expected that the supply will continue to fall short of demand. At the same time, the tightening of the land transfer policy will lead to limited land supply for medium and long-term warehousing and logistics. Therefore, in the medium and short term, investors should also pay attention to the urban renewal projects of industrial land application for construction and storage in addition to the stock projects. It should be noted that according to the regulations, the development of industrial projects needs to sign a full life cycle industrial supervision agreement, and there are tax requirements. Therefore, investors need to communicate in detail with developers on relevant matters and negotiate relevant safeguard measures when making project investment.
4、 Investment strategy of the second tier cities
1. Foshan
In 2021, the overall supply of high-level warehouses in Foshan has reached 2.674 million square meters, which is equivalent to the scale of Guangzhou. The main high-level warehouse properties are distributed along the main traffic arteries in Nanhai and Shunde near Guangzhou, and in Gaoming and Sanshui near the Guangzhou ring expressway connecting Baiyun Airport and the hub airport in the Pearl River Delta. All the high-standard warehouses in Foshan are non bonded warehouses, and the rent has maintained a rapid growth. The annual rent growth in the past four years has remained at a high level of 4.1%. Even though 569000 square meters of new supply will be available in 2021, the vacancy rate will remain low at 6.8% by the end of the year, and the market demand will be strong. In the future, with the continuous deepening of the economic integration between Guangzhou and Foshan, the infrastructure will be urbanized, the road traffic will be interconnected, and the cost will be mutually exempted, so that the logistics demand connectivity between the two places will be continuously strengthened. Foshan will continue to undertake more demand spillovers from Guangzhou. At the same time, as the warehousing and logistics distribution center on the West Bank of the Pearl River, with the continuous development of its own manufacturing industry, it will continue to attract a large number of e-commerce and third-party logistics radiating from Guangzhou and even the Pearl River Delta to enter the market, in addition to being the warehousing and distribution point for raw materials and end products of the manufacturing industry. In the next three years, the newly added supply in Foshan will be 560000 square meters, all of which are non bonded high-standard warehouses. The continuous growth of demand will make the future supply rapidly dematerialized. As most of the logistics warehousing properties have not yet entered the transformation period, in view of this, investors can focus on the transfer of non bonded warehouse stock projects and a small number of green space development opportunities in the high-standard warehouse gathering area. 2. the development opportunities brought by the future connectivity between the East and west coasts of Zhongshan Pearl River Delta will greatly help the development of Zhongshan's future logistics market. It is expected that the opening of Shenzhen China channel will accelerate the expansion of manufacturing industries in Shenzhen and Dongguan to the West Bank, resulting in a large increase in the logistics traffic of industrial products on the East and west coasts. The superposition of the export logistics of the original manufacturing enterprises on the West Bank will increase the market demand for high-standard storage facilities in Zhongshan. The properties of high-standard warehouses in Zhongshan are all non bonded warehouses, and the overall scale is smaller than that of core cities. In the past four years, the rent has maintained an average annual high growth of 4.0%. In the past five years, the vacancy rate has been below 3.0%. A total of 161000 square meters of new supply will be added in the next three years, with a small supply. Therefore, investors can pay attention to the properties in the triangle, Nantou, Minmin and Huangpu areas where the high-standard warehouse properties are concentrated. Since the development of Zhongshan logistics market started late, the existing properties and a small number of green space development projects in the future should be the main focus. 3. Huizhou high standard warehouse market is dominated by regional distribution. Its own economic volume is relatively small and its demand for logistics is limited. Therefore, the function of logistics warehousing is mainly to serve cities such as Shenzhen, Guangzhou and Dongguan, and a small part comes from the manufacturing demand driven by its own electronic information manufacturing industry. At the project level, the Huizhou market is characterized by a cluster of leading brands, which has gathered first-line logistics operators such as prologia, Ambo and Jiamin. From the perspective of the existing supply of warehousing property, it is mainly concentrated in Boluo, Zhongkai and Huiyang in Huizhou deep area, and the future supply increment is mainly concentrated in Huiyang and BOLUO, so these three areas should be the focus of investors. By the end of 2021, the current supply of Huizhou high standard warehouse is about 1046000 square meters, all of which are non bonded warehouse properties. Over the past four years, the average annual growth rate of high standard warehouse rent has reached 4.3%, and the vacancy rate has also remained at a low market level of 5.5% in 2021. The development of Huizhou market started late and began to develop after 2015. It is gratifying that in the next three years, the supply of Huizhou high standard warehouse market will exceed 600000 square meters, and the overall stock will approach 2million square meters, which will further enhance its strategic position in the bay area. Therefore, investors can focus on the transfer of Huizhou stock projects and some green space development opportunities in the medium and short term. 5、 Third tier city investment strategy 1 Jiangmen Jiangmen has a small logistics demand and mainly undertakes the logistics spillover demand from Guangzhou and Foshan. At the same time, thanks to the geographical advantage of being close to manufacturers, it also attracted large-area demand from leading cross-border e-commerce with low sensitivity to geographical location, as well as large-area distribution demand from some leading e-commerce radiating from the Pearl River Delta. In recent years, Jiangmen logistics market has developed rapidly. By the end of 2021, the total supply of high-standard warehouses is 506000 square meters, all of which are non bonded warehouses, ranking in the forefront among the nine remote cities in Guangdong, Hong Kong and Macao Dawan district. Driven by the demand from cross-border e-commerce, manufacturing and third-party logistics, the overall market has been fully leased by the end of 2021. In the medium and long term, Jiangmen is relatively abundant in land resources, and developers can still obtain land for logistics and storage at a lower price. Therefore, in addition to stock projects, investors should also pay attention to green space development opportunities. 2. Zhaoqing has the smallest economic volume in the bay area and its own logistics demand is small. As a channel radiating the western Pearl River Delta, it not only undertakes the demand overflow from Foshan, but also acts as a distribution center for some e-commerce radiating the western Pearl River Delta. The logistics facilities are mainly distributed in the areas near Foshan. The functional status linking the western part of the Pearl River Delta and the low rent level have also attracted the distribution of large-scale logistics demand of leading cross-border e-commerce with low sensitivity to logistics geographical location. By the end of 2021, the total logistics storage volume of Zhaoqing was 359000 square meters, and the vacancy rate remained at the market low of 2.8%. The connection of eastern and Western Transportation and the insufficient supply of other cities in the bay area will promote the continuous extension of logistics demand to the west, so as to continue to lead the prosperous logistics demand. Compared with other cities, the hinterland of Zhaoqing is rich in resources. Although the industrial land also needs to sign a regulatory agreement, the amount of tax requirements is low. Therefore, in the medium and long term, in addition to the existing property, the green space development project will also be the investment target of investment focus. 3. Zhuhai Zhuhai high standard warehouse property supply Co., Ltd. as of the end of 2021, there is only one high standard warehouse property of about 40000 square meters. The opening of the Hong Kong Zhuhai Macao Bridge and the opening of the Shenzhen Zhuhai channel in the future will inject new vitality into the Zhuhai logistics market. The spillover of trade demand from Hong Kong and Macao and distribution demand in Shenzhen will benefit the Zhuhai logistics market in the medium and long term. Therefore, investors can pay appropriate attention to the green space development opportunities in Zhuhai logistics market.
Source /cbre cbre_china