GLP Enters Into Strategic Partnership with Transfar Road-Port to Expand Logistics Network in China
- GLP establishes joint venture with Zhejiang Transfar Road-Port Development Co., Ltd (“Transfar Road-Port”), the leading developer of the road port platform in China
- GLP adds three road port assets comprising GFA of 951,354 sqm to its portfolio
- Partnership will bring significant logistic cost savings to GLP’s customer base and create attractive opportunities for future development
Singapore, 19 September 2011– Global Logistic Properties Limited (“GLP”), the market leader in modern logistics facilities in China and Japan, announced today that it has entered into a binding agreement to establish a joint venture partnership where GLP will own a 60% stake in Zhejiang Transfar Logistics Base Co., Ltd. (the “JV”). The JV will own three assets that are masterleased to the operator of Transfar Road-Ports. Going forward, GLP will develop and operate logistics parks adjacent to future road port projects providing a total solution platform for customers.
The “road port” business addresses the main problems of the domestic road logistics industry by creating a hub. This hub centralizes information by assisting manufacturers, retailers and third-party logistics companies (“3PLs”) to optimize the transportation of their goods domestically while utilizing small and medium sized trucking companies, which represent the majority of all trucking done in China. The strategic cooperation between GLP and Transfar Road-Port will integrate two major components in China’s industrial logistics chain to lower costs and improve efficiency for customers.
Mr. Jeffrey Schwartz, GLP’s Deputy Chairman and Chairman of the Executive Committee, said, “Transfar Road-Port and GLP are market leaders in China’s logistics industry with common goals. Transportation costs comprise approximately 55% of total logistics costs in China while warehousing costs are only 8%. Together both companies will provide complementary services, with the synergies significantly driving down transportation costs for our customers.”
Transfar Road-Port currently owns three operational road ports projects in Hangzhou, Chengdu and Suzhou with a total net leasable area (“NLA”) of 951,354 square metres. Transfar Road-Port has full ownership of the projects in Hangzhou and Suzhou and 75% share of the Chengdu facility. Local governments welcome the road port business model as it creates a centralised logistic hub and generates significant tax revenues.
Road transportation remains the main mode of freight transportation in China at 77% of total freight volume but is very inefficient given the majority of freight is transported through individual trucks (owned by small to medium enterprises). Demand for road port facilities is expected to grow in tandem with increasing domestic growth consumption.
Under the strategic joint venture, GLP will partner with Transfar Road-Port to develop logistics hubs. GLP will develop and operate warehouse facilities adjacent to the logistics hubs in future projects. Transfar Road-Port will focus on providing supporting services at the hub. As the market matures, GLP has the option to convert the hub’s existing truck storage areas into warehouse facilities.
Mr. Ming Z. Mei, Chief Executive Officer of GLP, said, “Leveraging on Transfar Road-Port’s network and land sourcing capabilities, we will accelerate our network expansion and enhance services to our customers. Our customers will be able to receive integrated solutions with our partnership with Transfar Road-Port.”
About Global Logistic Properties (www.glprop.com)
Global Logistic Properties (GLP) is Asia’s largest provider of modern logistics facilities. It owns, manages and leases out 337 completed properties in 127 logistics parks spread across 27 major cities in China and Japan, forming an efficient logistics network with properties strategically located in key logistics hubs, industrial zones and urban distribution centres. By providing flexible solutions of Multi-tenant, Build-to-suit and Sales-and-leaseback, GLP is dedicated to improving the supply chain efficiency for strategic expansion goals of the most dynamic manufacturers, retailers and 3rd party logistics companies in the world. The Group was listed on the Mainboard of Singapore Exchange Securities Trading Limited on 18 October 2010 (Stock code: MC0.SI).
Issued by: Global Logistic Properties Limited
Investor relations & Media Team
Email: investor.relations@glprop.com
Ambika Goel, CFA
SVP- Capital Markets and Investor Relations
Tel: +65 6643 6372
Email: agoel@glprop.com
