Korean logistics sector eyes recovery as foreign investments surge

Gonjiam logistics center in Gwangju, Gyeonggi Province, acquired by German asset manager DWS in July / Courtesy of MatePlus

Investment sentiment toward logistics centers in Korea is expected to rebound as foreign investors increasingly enter the market, viewing the recent downturn as a prime opportunity for bargain acquisitions, industry officials said Tuesday.

"Major global asset managers such as DWS, Blackstone and KKR are expected to complete logistics asset acquisitions in the third quarter, fueling optimism for a market recovery in the second half of the year," said Min Su-hee, senior director of capital market at Jones Lang LaSalle (JLL).

On July 28, Blackstone acquired two modern, grade A logistics centers totaling 120,000 square meters in Gimpo and Namyangju, Gyeonggi Province. The facilities are reportedly leased to some of the largest corporations in the e-commerce and logistics sectors, including Coupang.

"Logistics is one of our highest conviction investment themes in real estate globally and a focus for us in South Korea, particularly in the Seoul Metropolitan Area where last-mile new supply remains extremely limited and vacancy for such assets is at a low 4 percent range," Chris Kim, head of Blackstone Real Estate Korea, said in a statement.

In July, German asset manager DWS acquired the Gonjiam logistics center in Gwangju, Gyeonggi Province, which spans a total floor area of 63,660 square meters. The bidding process reportedly saw fierce competition among numerous domestic and international investment institutions.

Logistics centers gained popularity as investment assets during the pandemic, spurred by the explosive growth of the domestic e-commerce market.

However, since 2023, concerns about oversupply have triggered a sharp decline in investment. At the same time, rising development and labor costs, combined with high interest rates, have severely hindered the launch of new projects.

In the first half of 2025, new supply dropped by approximately 40 percent compared to the fourth quarter of 2024, with total annual volume expected to reach only one-third of last year's level, according to JLL.

Amid growing caution among domestic investors, well-capitalized foreign institutions have moved quickly to seize emerging opportunities in the Korean logistics market.

In the first quarter of 2025, transaction volume for logistics centers in the Seoul Metropolitan Area reached 1.4 trillion won ($1 billion), representing a 64.6 percent increase from the previous quarter. Foreign investors are estimated to have accounted for approximately 60 percent of that total.

This heightened activity is reflected in several major deals.

In March, global private equity firm Warburg Pincus acquired the Samsung Logis logistics center in Anseong, Gyeonggi Province, and announced plans to develop two additional facilities in the area.

The Government of Singapore Investment Corporation, the largest foreign investor in Korean logistics assets by cumulative investment, also purchased a large-scale logistics complex in Bucheon, Gyeonggi Province, for approximately 300 billion won in 2024.

"Going forward, investment from new foreign entrants is expected to increase, with a growing shift in focus from office assets to the logistics sector," Colliers Korea noted in a recent report.