Denver-based industrial property investor Prologis said this week that it plans to more than double its logistics holdings in China in the next two to three years.
At a groundbreaking event for a new $60 million logistics park in Shanghai, Angela Zhao, the vice president of Prologis China, said that the company is likely to add more than 10 million square feet of space in the next few years.
The company currently has more than 40 distribution facilities in 18 Chinese cities, with 1.27 million square meters of logistics space. Zhou said the company plans to hold 1.5 million square meters by the end of this year and then add one million square meters per year for the next two or three years.
Prologis says that it will invest a total of $2 billion in China by the end of 2010. The company has invested $500 million in China to date.
The announcement comes at the same time ProLogis has launched four new property funds to invest in distribution centers in the US, Europe, Mexico and South Korea. The new funds have a combined purchasing power of more than $14 billion (€10.4 billion). The launch came shortly after the company’s $1.9bn purchase of a CalSTRS logistics portfolio in July.
Prologis first entered China in 2003 one year before Beijing loosened restrictions on the logistics sector per the terms of its membership in the World Trade Organization. Today it manages almost 700,000 square meters of Chinese property. ProLogis has also established a distribution system serving the seaports, airports and industrial zones of China. In March, ProLogis expanded its operations in China to the inland distribution markets of Changsha, Chongqin, Chengdu, Wuhan and Nanjing.
China’s logistics market is becoming increasingly attractive to investors as the Chinese economy, particularly in the area of trade, continues to grow rapidly. Prologis has also been active in the sector in Japan. In December it established a joint venture with GIC Real Estate, the government of Singapore’s real estate investment arm, to acquire eight distribution centers in Japan for $136 million (€103 million).