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- January 1, 2016: Vol. 9, Number 1

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China logic: Urbanization is boosting growth in the Chinese logistics and infrastructure sectors

by Philip Pearce

In recent years, Chinese logistics properties have been in great demand from institutional investors, many of whom are attracted to the higher-than-average rental yields and investment returns. During the past two years, foreign and domestic investors have poured more than 60 billion yuan ($9.7 billion) into China’s logistics property market, according to JLL.

This surge in logistics demand in China mainly is due to the growth in urbanization, which has resulted in rising incomes in the country and increased consumption and travel by the growing middle class — and underpinning all this is a decades-long infrastructure investment push to build roads, trains, water and energy networks to support this growth.

These investments are spurred by the growing demand for prime logistics space in China from third-party logistics providers and retail operators, in particular for e-commerce, with China’s e-commerce market capable of exceeding those of the United States and Eu

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