Jones Lang LaSalle(US:JLL)2025-11-20 02:24Investment Rating - The report indicates a moderate recovery trend in the logistics and warehousing market in China for Q3 2025, supported by domestic consumption recovery and cost-reduction relocations [3][4]. Core Insights - In Q3 2025, the logistics and warehousing market in China continued to show signs of moderate recovery, driven by the gradual release of domestic consumption demand, with a 4.5% year-on-year increase in retail sales of consumer goods [3][4]. - The net absorption in major logistics markets was approximately 1.23 million square meters, a significant decrease compared to the same period last year, with notable activity in Kunshan and Jiaxing [4]. - The overall supply of logistics real estate decreased by over 40% year-on-year, with new supply concentrated in specific regions, leading to varying vacancy rates across cities [8]. Summary by Sections Market Demand - The demand for warehousing has been supported by the recovery of consumption, particularly in upgraded consumer goods, with online retail sales showing improving growth rates [3][4]. - The logistics demand from domestic e-commerce platforms and third-party logistics companies is gradually increasing, although some leading cross-border e-commerce platforms are cautious about expanding domestic warehousing [4]. Supply Dynamics - The total new supply of logistics real estate was about 1.18 million square meters in Q3 2025, reflecting a significant slowdown in supply growth [8]. - There is a notable regional concentration in new supply, with cities like Shanghai experiencing high vacancy rates due to over 300,000 square meters of new supply in a single quarter [8]. Rental Trends - Rental rates across major logistics cities continued to decline, with significant reductions observed in regions such as North China and East China, where some areas saw rental decreases exceeding 15% year-on-year [17]. - The competitive landscape has led landlords to adopt more flexible rental strategies, including price reductions and rental incentives to attract tenants [17][18]. Future Outlook - The logistics real estate supply is expected to stabilize overall, but regional disparities will persist, with some areas entering a supply release cycle while others maintain manageable supply pressures [12]. - In the medium to long term, as supply pressures ease and the consumption market steadily recovers, rental rates in key cities may stabilize and gradually increase by the end of 2026 [18].