- JD.com grows UK footprint, leasing 900,000 sq ft and launching Joybuy platform.
- US trade tensions drive Chinese companies to expand supply chains across Europe.
- Logistics developers highlight rising Chinese demand in the UK, Germany, Poland, and Italy.
Several of China's largest e-commerce and logistics firms, including JD.com, are returning to Europe’s warehouses, as tariffs imposed by US President Donald Trump alter supply chains and markets for manufacturers.
In the UK, for example, Chinese companies have occupied over two million square feet of space this year, likely set to surpass the 2.3 million square feet usage during the peak of the pandemic in 2021, based on data from CoStar. A comparable situation is occurring throughout continental Europe, as landlords observe a rise in questions from Chinese organizations.
“Europe is the last major market where Chinese firms can expand at speed, making them an increasingly important force in shaping the region’s logistics landscape,” said Claire Williams, head of UK and European industrial research at Knight Frank in London. She added that this is expected to persist because of changes in trade policy.
Although the top two economies globally haven't finalized an agreement on tariffs, Chinese manufacturers are exploring other markets for their products in anticipation of increased US tariffs. This is encouraging logistics companies to grow their presence in Europe, signaling the second surge of a warehouse boom that began on the continent during the pandemic, which disrupted supply chains and led to near-shoring.
JD.com, headquartered in Beijing, has accounted for the majority in the UK, leasing 900,000 square feet of space nationwide this year. This occurs alongside a major initiative in Britain, as the distributor launched Joybuy earlier this year, an e-commerce site offering discounted food, apparel, and groceries. The company has obtained premises in Milton Keynes and operates a distribution center in Coventry.
Super Smart Service, a subsidiary of the Zong Teng Group, Top Cloud Logistics, and Daals, a furniture retailer owned by Chinese interests, have also occupied space.
GLP, a logistics real estate developer and investor whose non-Chinese operations are currently owned by Ares Management, has rented nearly 400,000 square metres to Chinese e-commerce firms throughout the UK, Germany, Poland, and Italy in the last five years. GLP stated earlier this year that the existing trade situation has made Europe an increasingly competitive location.
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Not only Chinese logistics companies are broadening their presence in Europe. Manufacturers are also nearshoring their supply chains to avoid European tariffs after encountering increased obstacles to entering the US market.
Poland is a key location for fashion distributor Shein Group, which manages significant distribution centers in the Wroclaw region in the western section of the nation. Now that the tariff uncertainty has been resolved, following the US decision to impose a 10 percent tariff on most British goods.
Apart from auto suppliers and ecommerce companies, CTP, Europe’s largest publicly traded industrial real estate developer, is experiencing rising demand from Chinese manufacturers of computers and furniture as well.