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E-Commerce Growth Spurs Surge in GLP Logistics Leases

Amid customer demand for technology-enabled logistics facilities, logistics solutions provider GLP said it signed more than 92 million square feet of global lease agreements in the first half of the year.

The Singapore-based company, with offices in Chicago, Tokyo, Shanghai, Sao Paulo and London, said the growth comes as a result of a strong global portfolio of premium locations and innovative use of technology. The space it leased in the first half of the year is equal to roughly 1,100 Empire State Buildings.

In the U.S., GLP signed 20.8 million square feet of leases, of which 5.7 million square feet were new agreements. The company said demand continued to outpace supply, driven by growth in e-commerce and multi-channel retail operations. GLP’s lease ratio in the U.S. remains high at 94 percent.

According to a recent CBRE report, availability of U.S. industrial real estate fell to 7.2% in the second quarter, the lowest point since 2000. Overall, net absorption–the change of the supply of commercial space in a given real estate market over a specific period of time–across the 55 markets tracked by CBRE amounted to 59 million square feet in the quarter, the report noted.

In Japan, GLP expanded its partnership with Rakuten, one of the country’s largest e-commerce companies, with the signing of lease agreements totaling 1.7 million square feet. Rakuten plans to establish its Tokyo and Osaka fulfillment hubs at GLP Nagareyama II and GLP Hirakata III facilities, respectively. Both these developments are next-generation, LEED Gold certified modern logistics facilities that will enable Rakuten to optimize supply chain efficiency, GLP said.

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In China, GLP inked 61 million square feet of leases with leading third-party logistics and e-commerce customers, including Best Inc., and SF Express. GLP said demand in China is being driven by consumption upgrading in sectors such as consumer goods, food and auto parts.

European agreements were reached on 3.8 million square feet of space across the U.K. and continental Europe. One of the largest leases was signed with B&Q, a leading home improvement retailer in Swindon, U.K. In Germany, GLP’s Gazeley unit is working with one of the world’s largest e-commerce companies to deliver a 1.3 million-square-foot logistics and distribution warehouse in Westfalia.

Brazilian deals included a establishing a new customer relationship with Drogarias Pacheco, one of the largest pharmaceutical store chain operators in Brazil with the signing of a 301,000 square foot lease in Rio de Janeiro. GLP also significantly expanded its partnership with Mercado Livre, a leading e-commerce company that tripled its space requirements to lease 549,000 square feet of space.

“Innovation and technology are increasingly critical components of the evolving logistics landscape,” Steve Schutte, chief operating office of GLP, said. “These leases highlight our continued focus on creating a smart logistics ecosystem built around our vast infrastructure network. A GLP warehouse serves as a connecting point for customers to access the latest advancements in automation, robotics, data analytics and other adjacent growth sectors, to ensure the highest possible level of operational efficiency.”

GLP has more than $50 billion in assets under management across its real estate and private equity segments. The company’s real estate fund platform is one of the largest in the world, spanning 667 million square feet.