CBRE Korea Forecasts Greater Seoul Grade A Logistics Market Vacancy Rate to Reach 10% by 2027 Amid Reduced New Supply and Market Rebalance

- More than 80% of unbuilt projects totaling 12.36 million sq. m. face prolonged delays; new supply pipeline continues to shrink
- Demand led by 3PL and e-commerce remains solid; tenant survey reveals strong mid- to long-term expansion plans
- Structural shifts toward automation, integration and cold chain are expected to support a stable growth outlook

September 15, 2025 (Seoul) – CBRE Korea, the world's largest commercial real estate services company, announced in its logistics market report “A New Equilibrium for the Greater Seoul Grade A Logistics Market” that the market is resolving past concerns over oversupply. With reduced supply and resilient demand, it is shifting toward a phase of stable growth.

According to the report, as of August 2025, 172 projects totaling 12.36 million sq. m. in Greater Seoul have experienced construction delays of more than one year, with 81% now entering their third year since securing permits. Many projects have stalled due to ownership transfer delays, financing failures, or lack of development structures, while some have shifted to distressed assets or NPLs. Considering these structural constraints, new supply in 2026–2027 is expected to account for less than 5% of the current market size.

Unlike the post-pandemic years when rapid supply growth drove vacancy rates higher, recent supply contraction is easing imbalances. With delays and cancellations of new developments on the rise, supply-side risks are being rapidly resolved, while higher construction costs, stricter regulations, and land acquisition challenges are expected to continue limiting large-scale new projects.

On the demand side, third-party logistics (3PL) and e-commerce operators are maintaining strong momentum. According to the report, 79% of the leased floor area in Greater Seoul Grade A logistics centers in H1 2025 was occupied by 3PL (46%) and e-commerce (33%) tenants. Market leaders such as Coupang (2.79 million sq. m.) and CJ Logistics (1.73 million sq. m.) are driving growth, while Chinese platforms including AliExpress, Temu, and JD.com are further diversifying demand as they expand their presence in Korea.

Tenant surveys also reflect a positive outlook. About 72% of respondents expected business performance to improve within the next two years, and 63% indicated short-term plans to expand their logistics portfolios. Looking to 2030, 67% anticipated expanding their holdings, with 36% planning large-scale growth of 10–30% or more. These strategies are viewed as responses to e-commerce growth, supply chain efficiency, automation investment, and rising demand for fresh food and cold chain logistics.

As the market structure evolves, the overall vacancy rate for Grade A logistics centers in Greater Seoul is forecast to decline to around 10% by 2027. Dry storage facilities may see vacancy fall to below 4%, while cold storage facilities could sustain vacancy levels of 30% or higher due to oversupply and slower demand recovery. These asset-level disparities are expected to become key variables in future asset selection and investment strategies.

Falling vacancy and reduced supply are also impacting rental trends. Rent recovery is strengthening, led by dry storage facilities, and with limited new supply, rental pressure on prime assets is expected to intensify. At the same time, as tenants increasingly prioritize automation and integrated logistics operations, competition for prime assets is set to grow further.

Claire Choi, Senior Director, Head of Research at CBRE Korea, said: “The Greater Seoul Grade A logistics market has passed its oversupply peak and is entering a new equilibrium where reduced supply and steady demand converge. It is now the time for both tenants and investors to evaluate asset-level differentiators comprehensively and respond proactively to structural changes such as automation and integration.”