DHL, the world’s largest logistics provider, is the latest company to announce plans to expand in Hong Kong, following the groundbreaking of a new Interlink facility under construction by the Goodman Group.

Australian-listed Goodman, which has a regional head office in Hong Kong, is investing more than HK$4 billion in the project. Interlink is one of the largest industrial development projects currently underway in the world and the first major new Hong Kong warehouse project in nearly a decade. It is being built in the Tsing Yi port district, a strategically important air, road and sea cargo hub.

On completion in January 2012, the 2.4 million-square-foot development will be the fourth largest warehouse in Hong Kong. Designed to high technical and environmental specifications, it will also be among Hong Kong’s most modern and efficient warehousing and distribution centres.

About half of Interlink’s total gross lettable area has been preleased and optioned to two leading global logistics operators – German-owned DHL Supply Chain (Hong Kong) Ltd, and Japan’s Yusen Air & Sea Services. Goodman is also in discussion with other international logistics players, who may take up to 77 per cent of Interlink’s available space.

Pent-Up Demand
At the groundbreaking last month, Goodman Group CEO Greg Goodman said there was a significant pent-up demand in Hong Kong for efficient and modern warehousing facilities.

“The signing of two such prominent and well-respected companies in the logistics industry is testament to this, and to the development’s scale, its excellent location and its innovative and high specification of design,” Mr Goodman said. “Interlink marks a new milestone in the group’s commitment to Asia and our strategic expansion in Hong Kong and China.”

Supply of efficient warehousing space in Hong Kong is increasingly constrained as demand grows and existing buildings are converted to residential and commercial use, Mr Goodman said. Being strategically located for Hong Kong’s container ports, Hong Kong International Airport and major highways to the Chinese mainland, Interlink will introduce about five per cent of prime new space to the local market.

DHL Supply Chain will invest HK$360 million to create a multi-use facility at Interlink to meet growing demand for its range of bespoke services, particularly in the consumer, fashion and high-tech industries. More than 300 employees will be based at the site.

Key Market in Asia
Paul Graham, CEO of DHL Supply Chain Asia Pacific, said Hong Kong is one of the group’s key markets in Asia Pacific “and we remain confident in our growth potential here. As a high-quality facility, Interlink will enhance our operational efficiency and capabilities in offering best-in-class supply-chain solutions for our customers.”

The facility will offer immediate access to Tsing Yi Road, just two kilometres to Kwai Chung Container Port, 20 kilometres to Hong Kong International Airport, and 25 kilometres to the Shenzhen border.

Mr Graham said customers wanting to drive greater value in their supply chains are no longer simply looking at basic warehousing services. “With growing demand for increased end-to-end integrated logistics solutions, the new and conveniently located facility in Hong Kong will enable DHL to provide a comprehensive range of customised and cost-effective logistics services to meet the needs of customers in the dynamic Hong Kong market.”

He added that, once completed, the facility will function as a primary distribution centre for DHL Supply Chain’s established business in the fashion and apparel industry, supplying European-made garments across the Asian market, from Beijing to Sydney to Singapore.

“In addition, recognising Hong Kong’s strategic importance as a market on its own and a major gateway to Greater China, DHL Supply Chain has long developed its Hong Kong operations as a central hub for many leading retail brands, offering comprehensive warehousing and distribution service, as well as consolidating manufacturing from the Greater China area, for distribution to the region or globally,” Mr Graham said.

Meeting Customer Needs
DHL is building a primary apparel-distribution centre in Hong Kong to meet growing demand in its key markets in Asia
Yusen also thinks the new facility will help the company meet its customers’ future needs. “As a company, we have 36 years of history and experience in Hong Kong, and we believe that Hong Kong's role will continue to grow in importance in South China going forward,” said Yusen Managing Director Yasuhiko Nojima.

“We are looking forward to seeing the completion of Interlink, and to utilising this modern facility as the base for our logistics service. The facility will serve as a means by which we are able to satisfy our customers’ needs with our newly renovated, high-quality and reliable service.”

Interlink will be built in compliance with both the Hong Kong Building Environments Assessment Method (HKBEAM) and Leadership in Energy and Environmental Design (LEED) environmental assessment methods, with the aim to be the first of its type to obtain such accreditations and awards in Hong Kong.