Logistics investment trends and strategic occupier movements
Insights & recommendations
Since the COVID-19 outbreak in 2020, Korea’s e-commerce market has expanded, driving growing interest in logistics investment. Major tenants of large logistics centres , e-commerce operators, couriers, and distributors are all focusing on setting strategies to build optimized logistics centre infrastructure for fulfillment and last mile delivery. Investment in cold storage facilities for fresh food delivery is rising. Also, cold storage tenants are demanding more efficient operation strategies, aided by new technology.
- As development permits become more difficult to obtain, and as competition for developable sites intensifies, we expect further rises in land prices.
- We recommend investors focus on developing logistics centres that meet tenant specifications, to ensure quick lease up periods.
- We recommend investors actively use value added strategies to procure older, licensed logistics centres for redevelopment.
- We expect competition among investors to lead to continued growth in logistics transactions, and for cap rates to remain at or below 4%.