JD.com gets connected with bricks and mortar

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CHINESE e-commerce giant JD.com has invested US$306 million in pan-Asia logistics developer ESR Cayman, a vote of confidence by China’s largest retailer in the industrial property market as online shopping shows no signs of slowing.

JD Logistics CEO Zhenhui Wang said the investment not only deepens the strategic cooperation and synergies between the two companies, it also create an alliance that enables best-in-class logistics services for customers and businesses in China and beyond.

China’s e-commerce sector, which is the largest in the world, has ignited a logistics boom. According to the Bureau of Statistics of China, in the first quarter of 2018, online retail sales in China reached US$307 billion, accounting for 21.4% of total retail sales.

With the opportunities created by the burgeoning growth of e-commerce in pan-Asia, the two parties will seek to extend their cooperation in China and across other key markets in Asia.

“Investing in ESR, a leading pure-play pan-Asia logistics real estate platform and one of our major warehouse partners, presents tremendous opportunities for us,” Zhenhui said. “The investment in ESR will further strengthen our relationship to solidify and expand our logistics networks. We look forward to working closely, and together we will continue to expand the ecosystem to bring values to our customers and business partners.”

The boom in online retailing has benefitted industrial property landlords. Recently Goodman announced it leased 2.7 million sqm of space in the nine months to 31 March 2018, equating to $323 million of annual net property income.

Goodman leased 856,254 sqm of space in Australia, raking in extra rents of $122 million. In Asia, Goodman leased 1,015,555 sqm equating to $136.1 million and in the UK and Europe, 850,813 sqm was leased equating to $64.9 million.

CEO Greg Goodman said the increasing demand for prime industrial space globally continues to be driven by the growth of e-commerce around the world.

ESR co-CEOs Jeffrey Shen and Stuart Gibson said the move demonstrates JD’s vote of confidence.

“Leveraging JD’s network effect and smart supply chain capabilities, together with ESR’s exceptional penetration into both developed and emerging markets across Asia Pacific, this strategic alliance is poised to capitalize on megatrends in the region,” they said.

The ESR platform represents one of the largest in the Asia-Pacific region with assets under management (AUM) of US$12 billion, and over 10 million sqm of projects owned and under development across China, Japan, Singapore, South Korea and India.

Australian Property Journal