Storeganizer - Logistic trends in South Korea

What are the logistic trends for South Korea?

2020 was a remarkable year, even for the Asia Pacific logistics market. Pandemic-induced supply chain disruption has led many companies to review and strengthen resilience by diversifying production and sourcing.

Australian cities stand out as the best-served in the region by modern logistics stock, while Japanese markets appear to be the most underserved. Mainland China remains one of the world’s largest consumption markets and key player in the global supply chain and will increase further to serve domestic demand. Singapore is also one of the best-served Asian logistics markets due its small modern clusters of new and large supermarkets.

In this series of blogs we discover the current and future trends for the APAC market in Singapore, Japan, China and Korea. Let’s start with Korea.

Space availability remains tight
Pandemic-induced delays to several new logistics schemes of 2020 have pushed up new supply for 2021 to 94 million sq. ft. in Asian markets, an increase of 26%. The bulk of new supply in 2021 will take place in Greater Tokyo and Greater Seoul. Both cities are reporting strong pre-leasing demand from e-commerce companies.
New supply in Greater Seoul is predicted to reach 23,1 million square feet in 2021. Pre-leasing is growing, especially in prime logistic areas, which means vacancy remains low.

Logistics space keeps growing in Seoul
In 2020 1,75 million square meters of new logistics supply was completed in Greater Seoul, which is an absolute record. But in 2021 that number will be exceeded till 2,0 million square meters, partly due to construction delays as they were planned to be completed in 2020.

Total logistics supply in Greater Seoul reached 8,7 million square meters in 2020. In the next two years a further 6,3 million square meters are expected, mostly larger size facilities.

Seoul: e-commerce and third-party logistics on the rise
Third-Party Logistics (3PL) firms and e-commerce platforms occupy 50,2% and 24,6% of Grade A logistics space in Seoul. E-commerce growth will urge delivery companies to seek for new logistics space. The demand will off course increase, especially for transfer centre logistics properties.

Other key trends will include stronger demand and higher values for distribution centres near residential locations. This is a consequence of the larger demand for sizable volume of cold and mixed storage facilities, because of the growing demand for temperature-controlled facilities for fresh food delivery.

Source: CBRE

Future trends
What about the predictions for this year? Asia Pacific logistics rents are expected to rise across all markets in 2021, but there is more.

  • Tier I cities in mainland China will edge out Greater Tokyo and Singapore in rental growth.
  • E-commerce will continue to drive logistics leasing demand in 2021 as the pandemic accelerates the shift to omnichannel retailing.
  • Urban fulfillment centers (f.e. near residential neighborhoods) will continue to attract strong interest.
  • Demand for highly specialized cold storage for pharmaceuticals (f.e. vaccines) will reach new highs this year.
  • The deployment of robots and automation systems to enhance efficiency will further stimulate demand for warehouse space in 2021.

Storeganizer has started a new business partnership in Asia, more specifically in South Korea with G&S Seojin. Read more

Are you seeking for a solution to optimize the efficiency of your logistics space in the APAC region? Discover the storage system of Storeganizer and make an appointment with Dimitri Saerens, Business Development Manager EMEA & Asia, via or through our partner in South Korea.

Future trends
What about the predictions for this year? Asia Pacific logistics rents are expected to rise across all markets in 2021, but there is more.