Goodman Group (ASX: GMG) announced (link saves as PDF) today that its China commercial operations are booming in 2013. Over the last four months, the global integrated property group has signed over 100,000 m2 of new leases, keeping its total occupancy steady at a substantial 96%.
Goodman may have fashion frenzy to thank for its latest developments. Its 42,600 m2 Tianjin facility was leased entirely to Bestseller Fashion Group as it expands its need for warehouse space. An additional 16,600 m2 has been leased by shipping company DB Schenker after it secured a new contract with a “major US fashion brand.”
Two local shipping companies added on 30,000 m2, with just over two-thirds of the space to serve as the main distribution centre for BP China. This newest round of contracts represents a diverse array of new contracts with new businesses, as well as renewed or expanding contracts with existing clients.
““We are delighted to welcome new customers to our portfolio and pleased to be building on our relationships with existing customers as they expand their operations in mainland China,” said Goodman Managing Director for Greater China Philip Pearce in a statement. “The leasing success we have achieved demonstrates the high quality of our product and service offering, and proven ability to attract and retain customers.”
Commenting on sectorwide trends in China, Pearce noted: “We continue to see a shortage of prime logistics space, reflecting the growth in consumer demand, the shift to e-commerce and the rising middle class in China.” Looking ahead, Goodman expects sustained rental growth in the range of 5% to 10%.
Goodman’s 17-country stretch gives it an edge on international property development, and its strong advancements in China should help the corporation continue to boost its emerging market presence. Unlike other investments that rely entirely on China’s ability to up its exports, Goodman represents a diversified play with sales sourced from both internally-driven and internationally driven China-based customers. If rental growth keeps up its current pace, Goodman’s Greater China investments should continue to pull profit for your portfolio.
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