Logistics giant DHL broke ground for a US$127.89 million warehouse facility at Tampines LogisPark that will be completed by the second half of next year.

The 90,000 sq m complex will be DHL's 21st facility in Singapore and its largest in the city state, increasing its warehouse capacity by 40 percent, reported Staits Times.

More than 300 employees will be added to DHL Supply Chain's headcount, which is now about 1,700. DHL plans to boost its staff strength in the region to 25,000 by next year – an increase of 65 percent over last year.

The facility will also include an innovation centre focusing on research and development in the logistics industry – DHL's first such centre outside Germany.

Southeast Asia's rapid urbanisation and the launch of the Asean Economic Community next year are expected to remove trade and investment barriers and boost competitiveness, said Steve Walker, DHL Supply Chain's chief information officer for Asia-Pacific, Middle East and Africa.

The new warehouse will help the company take advantage of regional opportunities in industries such as aerospace, health care and technology, he added.

DHL will build the complex in partnership with the listed Cache Logistics Trust. Cache will put in $95.92 million of the costs, with DHL adding $31.97 million. It will be Cache's first development project; it had built its portfolio through acquisitions only.