‘[Seoul Economy]’,
Due to oversupply, it has been revealed that the vacancy rate of logistics centers in the Seoul metropolitan area has sharply increased.
According to the commercial real estate comprehensive service company Alsquare on the 2nd, a total of 184,525 square meters (about 610,000 pyeong) of logistics centers were newly supplied in the first half of this year in the Seoul metropolitan area. As a result, the cumulative supply of logistics centers in the Seoul metropolitan area by the end of the first half of the year increased to a total of 33,652,892 square meters (about 101.8 million pyeong), a 6.3% increase compared to the end of last year.
Previously, due to the growth of the e-commerce market amid the aftermath of the COVID-19 pandemic, large-scale logistics centers were supplied in the Seoul metropolitan area from 2022 onwards. With the sudden increase in leased space, vacancy rates are also increasing. In the first half of the year, the average vacancy rate of ambient temperature logistics centers in the Seoul metropolitan area rose by 6.6 percentage points to 16.9% compared to the second half of last year. Even the average vacancy rate of cold storage centers increased by 5.7 percentage points to 41.2%. Especially in the Seoul metropolitan area, the vacancy rates of ambient temperature logistics centers and cold storage facilities in the western region (Incheon, Siheung, Ansan) reached 20.2% and 66.9%, respectively.
There are also many cases of converting cold storage facilities into ambient temperature facilities. In the first half of this year, Anyang’s ‘Kwangyang Logistics Center’ and Hwaseong’s ‘Jinwoo World Logistics Center’ converted cold storage centers into ambient temperature facilities. The ‘Bucheon IC Logistics Center’, completed last year, offered 3 upper floors for lease without using cold facilities.
As it becomes more difficult to recruit tenants, rental fees remain stagnant. The average rental fee per 3.3 square meters of ambient temperature logistics centers in the Seoul metropolitan area was surveyed to be 33,106 won, and the rental fee for cold storage centers was 61,951 won. These amounts increased by 646 won and 840 won, respectively, compared to the second half of last year. The total transaction amount of logistics centers in the Seoul metropolitan area in the first half of this year recorded 2.9 trillion won. The transaction amount increased by 70% compared to the second half of last year, but more than half of it was explained by the company to be cases of ‘ownership transfer according to pre-purchase agreements,’ so the actual asset transaction amount excluding these cases remained at a similar level, according to the company.
Jin Won-chang, director of Alsquare’s Big Data Consulting Team, said, “There is clearly demand, but due to oversupply, there is ongoing upward pressure on vacancy rates,” and that “as new supply is showing a decreasing trend, if this trend continues, the supply and demand will stabilize.”