Occupier demand for logistics facilities in Greater Seoul has surged this year as the COVID-19 pandemic accelerates existing structural changes and spurs the emergence of new consumption trends.
As investors look to increase their exposure to what is one of the most sought-after property sectors in Asia Pacific, this report provides a comprehensive overview of the market by analysing the origin, industry, size, building type, location and other key features of tenants in 75 logistics properties in Greater Seoul.
3PLs account for 50.2% of total occupied space, followed by e-commerce platforms, which utilise 24.6%. Collectively, the two industries occupy three quarters of leasable Grade A logistics space in Greater Seoul, underlining their market dominance.
Demand from e-commerce platforms is strongest in areas less than 30km from Seoul. This is because these occupiers require conveniently located logistics facilities to conduct rapid deliveries. In areas 30-60km from Seoul, which includes the cities of Yongin and Incheon, 3PLs occupy 64% of space.
The number of tenants occupying a space less than 2,000 pyeong (6,600 sq. m.) was found to be the highest, reflecting high levels of demand from a broad range of industries for relatively small spaces. The number of tenants leasing an area of more than 20,000 pyeong (66,000 sq. m.) accounted for roughly 10% of the total surveyed by CBRE, underling growing demand from large space users, primarily e-commerce platforms.
CBRE’s study found that assets built six years ago or more are mainly leased to 3PL companies, which occupy 56% of GFA, with e-commerce platforms taking up just 9.5% of GFA. In contrast, the e-commerce industry occupies a far larger proportion of space in properties built less than five years ago, taking up 32% of GFA, with 3PLs accounting for 48%.