M&G Real Estate has bought its second logistics facility in South Korea for KRW155.5bn (鈧�120m).
The 100,000sqm Yongin Baegam Logistics Centre, located close to Seoul, has been acquired on behalf of its core Asian property strategy.
Manager of the strategy, Richard van den Berg, said: 鈥淲e are positive about the fundamentals in Asia Pacific鈥檚 logistics sector, particularly in Korea, where supply is limited and demand is strong.鈥�
Van den Berg told 91传媒在线: 鈥淪outh Korea鈥檚 logistics sector is seeing much interest from both domestic and foreign institutional investors, much like the rest of the world.
鈥淪imilar to markets like Japan and China, it is the lack of modern logistics facilities that is driving strong occupier (tenant) upgrades and relocation demands for more modern, higher specification industrial space,鈥� he said.
With increasingly limited land allocated or approve for warehouse construction, the South Korean logistics sector may see lower levels of supply, particularly in well-located areas that are close to key highways and logistics clusters.
鈥淭he continued investor interest should drive yields lower for well-located, prime logistics space鈥� he added.
He referred to research by Euromonitor which estimated that online retail in South Korea is expected to make up more than 35% of all retail spending by 2023 or to increase from US$72bn in 2018 to US$133bn.
Currently, online sale accounts for 27% of all retail sales in South Korean.
Van den Berg said: 鈥淢&G has been investing in South Korea since 2006 and our first logistics investment was Homeplus Hub in Ansung, acquired in 2017.
鈥淥ur experience investing in Korea has been positive from both income and capital appreciation perspectives. We will continue to look for high quality, well-located logistics assets in South Korea that fit our investment strategy.鈥�
