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Asia Pacific’s global hubs will continue to dominate in 2030, while regional and local hubs are expected to grow rapidly, revealed a CBRE report.
In the Asia Pacific Logistics Hubs 2015 report, the property consultancy categorised hubs as global, regional or local, and ranked the region’s logistics hubs based on primary demand drivers: infrastructure developments, market demand and the business environment.
Based on the CBRE logistics hubs model, Asia Pacific has eight global logistics hubs – Greater China’s Hong Kong, Guangzhou, Shanghai, Shenzhen, Tianjin; Japan’s Tokyo, Osaka-Kobe; and Singapore.
According to CBRE, these global hubs have strong similar characteristics, while improvements in infrastructure, stronger population growth – especially in China – and additional trade agreements among nations help normalise the differences between these hubs, making them more equal in logistics importance.
“We expect the current dominant global hubs to remain strong in 2030,” said Dennis Yeo, Managing Director of Industrial & Logistics Services at CBRE Asia.
“The drivers of infrastructure, market demand and the business environment are expected to remain robust in these hubs. These hubs are located along the major trade corridors, connected to major international transportation networks, contain large amounts of prime logistics space and have a variety of sophisticated logistics operators.”
However, other emerging regional and local hubs – like China’s Fuzhou, Chengdu, Ningbo, Hangzhou; India’s Mumbai, Delhi; Vietnam’s Ho Chi Minh City; and South Korea’s Busan – are also growing in importance due to the shift in low-end manufacturing, rising consumption power, infrastructure and policy developments.
Notably, the stronger population growth and migration rate into the Chinese global hubs – Shenzen, Shanghai and Guangzhou – are making these hubs more consumption driven.
Despite the low population growth in Japan, Tokyo is still forecasted to be the world’s biggest urban agglomeration by 2025, helping the city remain a prime consumer market.
“Furthermore, in addition to China opening more free trade zones, recent negotiations were concluded on the Trans-Pacific Partnership (TPP). The world’s largest free trade agreement is expected to increase trade flows and lower cost of goods for participating Asia Pacific countries,” said the report.
Japan and China are also spending heavily on infrastructure while gradually lowering tariffs to support the movement of goods.
“With these regional and local hubs in Asia Pacific growing rapidly, they will continue to shape the future supply chain of logistics, improving the economic outlook for the region,” said Dr Henry Chin, Head of Research at CBRE Asia Pacific.
“Despite certain challenges in the sector – lack of modern logistics stock, restrictions on foreign ownership, transparency concerns i.e. corruption issues, the uncertainty of trade agreements – these hubs will play an increasingly important role in bringing a multitude of opportunities for the region, as well as globally,” he added.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg