China’s logistics cold storage: cold space ushered in a development boom (with report)

Summary

In recent years, with the continuous improvement of the income level of Chinese residents, consumers’ demand for diversified consumption of food types, quality, nutrition, and tastes has also increased significantly. Fresh food, on the other hand, needs to be transported, processed, stored and distributed by refrigerating or freezing. Driven by strong consumer demand, my country’s cold chain logistics industry is entering a stage of rapid development.

According to data from the Cold Chain Logistics Professional Committee of the China Federation of Logistics and Purchasing (hereinafter referred to as “China Federation of Things Cold Chain Committee”) and Zhiyan Consulting, China’s cold chain logistics industry has achieved double-digit growth. In 2020, its market size will reach 415 billion yuan, a year-on-year increase of 22.38%. Taking into account the future development potential, it is expected that by 2025, the market size of China’s cold chain logistics industry will further grow to 897 billion yuan.

There are many factors driving the development of China’s cold chain logistics industry, mainly including: increasing consumer purchasing power; increasing awareness of food safety; continued emphasis on food security; increasing demand for value-added services; and growing demand for pharmaceutical transportation, storage, and distribution , although the demand for pharmaceutical cold chain services is relatively small.

Focusing on seven urban markets in China (i.e. Beijing, Shanghai, Shenzhen, Guangzhou, Wuhan, Chengdu and Chongqing), Shanghai has the largest amount of cold storage at 902,286 square meters, followed by Guangzhou and Beijing, according to IoT Cloud Warehouse data.

Given the continued demand for this type of space, we expect the shortage of available rental space to lead to higher rents in some markets.

According to RCA data, China’s industrial logistics ranks first in the number of investment transactions in 2021, accounting for 37%. Ninety-six percent of the transactions were “other industries”, while cold storage logistics storage facilities (16 investment transactions were recorded) accounted for 4% of industrial logistics transactions.

Finally, in addition to industry drivers, there are a number of underlying trends that are shaping the development of the cold storage market in China, three of which are major: sustainability; technology; and; warehouse design.

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