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Korea Logistics Market

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Trends in Institutional Investment

 

With the development of e-commerce, investors’ interest and asset weighting in logistics properties has been growing, especially because they tend to provide higher returns than office properties. In addition, logistics centres in Korea are increasingly state-of-the-art facilities, incorporating technologies such as robotics, voice recognition, and artificial intelligence. Global logistics conglomerates are acquiring IT companies, and we expect Korea to follow the trend due to the increasing demand for modern logistics facilities.

 

Recently, as the National Pension Service of Korea (NPS) and Public Officials Benefit Association has created a KRW350 billion “blind fund” to invest in domestic logistics centres, we expect the NPS to be a major investor in the logistics market. We believe that the yield on Korean logistics properties currently ranges from 6% to 7%. Over the next few years, we believe that yields will remain at around the current level or decline marginally given the growing interest of investors in logistics properties. As supply in Icheon and Yongin has been increasing, we think that districts south-west of Seoul such as Ansan and Pyeongtaek which have low supply and low land costs will be the next targets for investors.


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Korea Logistics Market

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