A major player in the logistics sector anticipates continued adjustments in rental rates across China in the upcoming quarters, reflecting the need to align expiring contracts with current market dynamics, as discussed during its recent annual general meeting. The prevailing leasing landscape in China remains challenging due to a slower-than-expected recovery post-pandemic and an oversupply of warehouse space. These factors have led tenants to favor shorter-term agreements rather than renewing leases.
Emphasizing occupancy stability, the sector maintains a robust 93.2% occupancy rate as of March 31. Looking forward, a projected decrease in new logistics space entering the market in 2024 is expected to foster a recovery phase, particularly benefiting key tenant segments such as e-commerce and third-party logistics providers.
In strategic portfolio moves, the sector has completed acquisitions totaling over $1.1 billion for 12 modern logistics properties, while divesting $200 million worth of older properties in FY2023/24 to optimize its asset mix. Future plans include divesting three additional properties in Singapore and China valued at approximately $337.4 million. Proceeds from these sales will be reinvested into high-growth Grade A assets aimed at enhancing portfolio performance.
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