Prepared by

Asia Pacific Logistics Market Overview

Colliers International China

Prepared for

NAIOP

Tammy TangManaging Director | China

Qualifications

The University of Hong Kong

Bachelor of Business

Administration

Expertise

Tammy Tang is the managing director of Collier International China. She has more than 22 years'

experience in real estate industry and her footprint is all over China. She has a deep understanding

of development strategy, leasing and sales management, investment, intermediary, consulting,

government relations, industry regulations and asset management. She is a highly respected leader,

dedicated to promoting the development of the industry and training the new people.

Professional Accomplishments

Tammy Tang has operated many comprehensive projects in more than 20 cities in China, including

more than 70 consulting services for different type of real estate. She is the most experienced real

estate development strategy expert in China. At the same time, with her keen market insight, she

has long been involved in industrial real estate, pension real estate, data center and other emerging

real estate industries, and has in-depth understanding and rich experience.

01 ASIA PACIFIC LOGISTICS PROPERTY MARKET OVERVIEW

Country Developers’ Footprints (Existing & Future)

China More than 40 developers

Hong Kong Goodman, Mapletree, SF, Cainiao

Japan GLP, Goodman, ESR, ProLogis, UI, Mapletree

Korea ESR, Mapletree

Singapore Mapletree, Prologis, ESR, LOGOS

India Indospace-GLP(JV), ESR, Mapletree, LOGOS

Thailand WHA, Ticon

Malaysia Goodman, Mapletree, Cainiao

Vietnam Mapletree

Indonesia Samudera Indonesia, LOGOS

PhilippinesStoragemart, Secure Storage Services, Safehouse Storage, Loc and Store, Kahon PH, Aspen Storage

Myanmar BPHL

Australia ESR, Goodman, LOGOS

New Zealand Goodman, LOGOS

ASIA PACIFIC LOGISTICS PROPERTY MARKET OVERVIEW DISTRIBUTION OF MAJOR DEVELOPERS Japan

KoreaChina

Hong Kong

Philippines

India

VietnamThailand

Myanmar

Malaysia Singapore

Indonesia

Australia

New Zealand

42.0

36.6

26.4 25.7

21.9 21.719.6 19.3

16.0

12.310.7 10.5 9.8 9.0 8.1

6.9 6.5 6.4 6.35.1 5.1 5.1 4.8 4.8 4.4 4.0 4.0 3.9 3.5

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

The World's Top 50 Ports in terms of Container Throughput (2018)in million TEUs

AP ports account for

in world’s top 50 ports

58%

Source: World Bank

ASIA PACIFIC LOGISTICS PROPERTY MARKET OVERVIEW IMPROVING INFRASTRUCTURE

5 712 15 18

25 2632

39 41 44 46

60

82

98

137

0

20

40

60

80

100

120

140

160

Logistics Performance Index 2018 Global Rankings

▆ High income

▆ Upper Middle income

▆ Lower Middle income

Source: World Bank

Customs Infrastructure

Indicators

Logistics quality and competence

Tracking and tracing

International shipments

Timeliness

ASIA PACIFIC LOGISTICS PROPERTY MARKET OVERVIEW LOGISTICS PERFORMANCE

→

↓12

↓8

↑6

↑14 ↑2

↑ Rank higher than 2012

↓ Rank lower than 2012

↑3

↑13

↑27

↓10↓6

↑3

↓2↑8↓4

↑8

Draft

• On-demand warehousing

• Automation-as-a-Service

• Co-working space in logistics sector

• Utilizing technology to modernize

customs systems and processes

Future Trend Transformation in logistics property sector

• Hyper-connected facilities

• Elevated clear heights

• Automation

• Sustainability

• Super-flat to sloped floors and engineered

concrete floors

• More storeys

• Cold chain storage warehouses

• Location is key

ASIA PACIFIC LOGISTICS PROPERTY MARKET OVERVIEW TRANSFORMATION AND TREND

02 CHINA LOGISTICS PROPERTY MARKET OVERVIEW

15% 86% -5%pp57million

Based on 33 hotspot cities on rental map as of 2H2019

RMB 1.07/sqm/day

-1.6%Total Stock Growth of Total Stock

2H2018-2H2019Occupancy Rate Growth of Occupancy

Rate 2H2018-2H2019 Effective RentalGrowth of Effective

Rental 2H2018-2H2019

*Weighted Average

CHINA LOGISTICS PROPERTY MARKET OVERVIEW HISTORICAL DATA

34,029,000

40,647,000 43,905,000

49,933,000 51,815,000 57,207,000

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

1H2017 2H2017 1H2018 2H2018 1H2019 2H2019

Total Stock of Hotspot Cities

sq.m

84%

91%93%

91%88%

86%

60%

65%

70%

75%

80%

85%

90%

95%

1H2017 2H2017 1H2018 2H2018 1H2019 2H2019

Occupancy of Hotspot Cities

1.01

1.03

1.07

1.09 1.08

1.07

2%

4%

2%

0%

-1.6%

-4%

-2%

0%

2%

4%

0.96

0.98

1.00

1.02

1.04

1.06

1.08

1.10

1H2017 2H2017 1H2018 2H2018 1H2019 2H2019

Average Rental of Hotspot Cities

Average Rental (RMB/sq.m/day) Growth (%)

CHINA LOGISTICS PROPERTY MARKET OVERVIEW Logistics Property Rental Map

03 OPPORTUNITIES IN CRISIS - LOGISTICS CORONAVIRUS SURVEY

Colliers’ Survey Brings Live Reactions from the Logistics Market

The outbreak of coronavirus has strained most manufacturing

and service industries in China. The broader economic effect on

China is still hard to gauge, making bold predictions difficult. To

appreciate how the market is reacting to the coronavirus,

Colliers has carried out a telephone survey of over 700 landlords,

tenants and investors, providing more clarity on how market

participants expect to position themselves in 2020.

The logistics survey includes 70 logistics and E-commerce

professionals to reflect the outbreak’s impact on China’s logistics

property market, of which 45% are developers, 34% are from E-

commerce businesses, 6% work in 3PL companies, and the

remaining 15% are other stakeholders from the industry.

Developers

开发商

45%

E-commerce

电商

34%

Others

其它

15%

3PL6%

Respondents by type

Feb, 2020

Respondents’ View on Short-term Impact on E-commerce

Yes47%

No38%

Not sure15%

Do you agree that staying

at home boosts online

shopping?

Nearly half of the respondents believe E-commerce is benefitting from the recent coronavirus outbreak, whereas 38% do not agree with it.

The other 15% think it is a tough question to answer.

• Demand for medical products and online fresh food is soaring

Supply Side:

• Communication cost for E-commerce business increases during the Chinese New Year

holiday and Covid-19 outbreak

• Manufacturing is delayed due to the outbreak, and thus have an impact on supply chain

• Some suppliers are hesitant to stop at ports in China, which can cause delivery delays

• Chinese New Year causes labor shortage for couriers

• Traffic control slows shipments

• Warehouse operation pause and delivery delays result in order cancellations

• Increase of cost of labor and logistics costs

Short-term Positive factors

Short-term Negative factors

Demand Side:

• Staying at home limits shopping demand and urge

• Concerns about virus transmission via product delivery

• Large size products that need on-site assembly Feb, 2020

Considering the negative impact of the epidemic in the short term, 35% of the respondents have a negative attitude towards the e-commerce sales

forecast in 2020. However, 65% of respondents believe that e-commerce sales will be flat or grow, and 31% of them are more optimistic about the

number, as they expect it to grow more than 15% YOY. Although some industries suffered short-term damage from the epidemic, others are looking

to be boosted, including medical and fresh food products.

But the Majority Believe E-commerce Revenue Will Grow in 2020

Decrease35%

Flat10%0-5%

3%5-10%

7%

10%-15%14%

More than 15%31%

Respondents’ E-commerce

revenue growth

estimation

• Luxuries, durable goods, clothing, cosmetics,

electronic products, home appliance, etc.

Industries under short-term negative impact

• Medical and pharmaceutical related items• Fresh and frozen food

Industries positively impacted

Feb, 2020

Respondents Have Different Expectations of Rents and Vacancy

Increase

40%

Decrease

43%

Flat

17%

Expectation on rents in

2020

Increase

32%

Decrease

41%

Flat

23%

Unclear

4%

Expectation on vacancy rates

in 2020

40% of respondents expect rent to rise, 43% expect it to fall, and

the rest 17% think it will flatten in 2020.

The main reasons for a rent decline include:

• slowed logistics operations;

• declining consumption (other than medical and food products);

• delayed manufacturing; and

• potential rent-free period or discounts given out to tenants.

41% of the respondents expect a vacancy rate decline, 32% expect it

to rise, while the remaining 23% expect it to be flat YOY in 2020.

The reasons for a vacancy rate rise mainly include:

• traveling restriction;

• controlled traffic and road blocks; and

• high labor costs, which might be extended well after the

epidemic is over, as the recovery may be gradual.

Feb, 2020

In the short term, the e-commerce industry might be impacted by various negative factors, which is reflected by the respondents' forecast of e-

commerce sales and warehouse rents. But in the long run, the user base of E-commerce is cultivated during this period, with the following reasons:

E-commerce Might Take a Hit in the Short-run, But Should Be Boosted in the Long-run

Demand for warehouse

and cold chain should rise

Senior citizens are embracing

online consumption, while other

consumers develop the habit of

buying fresh food online

Changes in consumption habits

Fresh food and pharmaceutical

industries may plan to increase stocks

in the long-run

E-commerce increases stock

Feb, 2020

With Improvement of Epidemic, the Leasing Market is about to Pick up Again

Government PoliciesGovernment action is very effective. Firms and consumers has already seen benefits and get more confidence.

Logistics Property MarketWe witnessed gradual recovery of leasing market in the last 3 weeks, and fully recovery of signing leasing contract is expected to be by the end of Q2.

Financial Reduce Financing Cost

RentalMore rent-free period

TaxTax reduction and deferment

Subsidies & RebatesSupport industry & reduces labor costs

Human ResourceEg. Implement flexible employment policies

Government ServicesEg. Anti epidemic government services

Spending Coupon30+ cities issued a total of USD 790m in spending vouchers

Inquiries ↑ Inspections ↑ Occupancy ↑

Apr, 2020

THANK YOU

Tammy Tang

Managing Director | China

Logistics Group Lead – Asia

+86 159 0077 3610

Tammy.tang@colliers.com