Chilled Space on the Boil
Cushman & Wakefield, a leading global real estate services firm, today released its China Cold Storage Logistics -- Chilled Space on the Boil report.
Shaun Brodie, Head of Occupier Research, Greater China, Cushman & Wakefield said, “As China’s society has become more affluent over recent years, so consumer demand for a greater variety of food, greater quality food, food with a greater amount of nutrition, and food with a greater variety of taste has also increased significantly. Much of this food is fresh and needs to be transported, processed, stored and distributed in a cold or frozen state and this has led to a continually burgeoning cold chain industry in China.”
According to the Cold Chain Logistics Committee (CFLP) and the Intelligence Research Group, the cold chain industry sector in China has enjoyed double digit growth. In 2020, the market size reached RMB415 billion, a year-on-year growth of 22.38%. Considering the future growth momentum, China's cold chain logistics market is expected to further increase to about RMB897 billion by 2025.
China’s cold chain logistics industry growth (2017-2025)
Source: Cold Chain Logistics Committee (CFLP), The Intelligence Research Group, Cushman & Wakefield Research
The underlying factors which are having an influence on the growth of the cold chain industry sector in China are many, but some of the more important reasons include:
- Greater consumer spending power
- A further emphasis on food safety
- Continued importance placed on food security
- More value being added to goods during the time between when they enter and exit the cold chain system
- Even though playing a small role in cold chain services demand, an increasing need to transport, store and distribute medicines
When examining information and data from Warehouse In Cloud, and focusing on seven selected city markets in China, (Beijing, Shanghai, Shenzhen, Guangzhou, Wuhan, Chengdu, and Chongqing), Shanghai has the largest stock of cold storage warehouse space, at 902,286 sq m. The next two sizable markets in the city group are Guangzhou and Beijing.
Given the continued demand for this type of space, we expect available space for lease to be limited, with rentals anticipated to see uplift in a number of markets.
When considering investment, and in this case, investment deal number, according to RCA data, the industrial property sector took the top spot regarding investment volume in the Chinese mainland in 2021. Of the 37% registered, 96% of deals were recorded as ‘other industrial’, while cold storage logistics warehouse facilities, at 16 transactions for the year, made up 4% of industrial deals in 2021.
Property sectors: Share of investment transaction volume in the Chinese mainland (number of investment deals) (2021)
Source: RCA, Cushman & Wakefield Research
Finally, apart from the industry drivers, there are a number of underlying trends influencing the cold storage logistics warehouse market in China and three major developments are:
- Advances in warehouse design
Tony Su, Managing Director, Head of Industrial & Logistics Property Services, China, Cushman & Wakefield said: “In the coming years, we expect to see more cold storage logistics warehouse supply, not only for the storage and distribution of fresh commodities, but also for the storage of perishable medicines. Cold storage logistics warehouse space in China will also improve on quality, through enhanced sustainability, having more advanced integrated technology, and being designed to be more optimized operationally. In view of increasing market demand as well as ever-improving facilities, cold storage logistics warehouse properties in China are set to continue to pique investor interest.”
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