[Edaily Marketin KIM SUNG-SOO Reporter] While the investment market for logistics centers in the Seoul metropolitan area is showing signs of recovery, the “the rich get richer, the poor get poorer” phenomenon is becoming even more pronounced.

Although the volume of transactions last year returned to normal levels, the polarization between assets is becoming more pronounced as investor preference has shifted toward large, high-quality assets. This polarization between large core assets and cold-storage or non-core assets is expected to intensify further in the future.

Large-scale facilities with a gross floor area of 30,000 pyeong saw a “record-high” 9 transactions last year

According to Colliers Korea

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a global real estate services and investment management firm

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on the 7th, the average cap rate for the Seoul metropolitan area logistics center market in the first quarter of this year was 5.2%, continuing a gradual downward trend since 2023.

is an indicator used to evaluate real estate investment returns; it quantifies the annual return on investment in commercial real estate. It is calculated by dividing the net income generated by the property over one year by the purchase price.

Properties with prime locations and low investment risk tend to have lower cap rates, while those in outlying areas or regions with high investment risk tend to have higher cap rates. A “decline in the cap rate” for a specific property indicates that the property’s price has risen.

The transaction volume for logistics centers in the Seoul metropolitan area during the first quarter of this year totaled 752 billion won. A total of seven assets were traded, covering an area of approximately 339,000 square meters. The expansion of the overall transaction volume was driven by a number of properties entering the market since the first half of last year, as well as a series of transactions involving large, high-quality assets.

Given that there are currently many assets under consideration for sale or in the process of being traded, this year’s transaction volume is expected to remain at a level similar to last year’s.

Last year, the transaction volume for logistics centers in the Seoul Metropolitan Area totaled approximately 4.9 trillion won. While this fell slightly short of the robust levels seen in 2022 (5.3 trillion won), it marked a recovery compared to 2024 (4.3 trillion won), a year earlier.

Price adjustments for logistics centers appear to be moderating somewhat. Last year, the average transaction price for logistics centers in the Seoul Metropolitan Area was 2.01 million won per square meter, a decline of only 3.4% from the previous year. However, the gap in price expectations between sellers and buyers remains significant, and sales through public auctions continue, so downward pressure on asset values is expected to persist for the time being.

Looking at the breakdown of buyers from last year through the first quarter of this year, overseas investors maintained a high share of purchases at approximately 71%. KKR made its presence felt by investing in properties such as the Incheon Cheongna Logistics Center, the Fila Logistics Center in Icheon, Gyeonggi Province, and the Yangbyeon-ri Logistics Center in Miyang-myeon, Anseong, Gyeonggi Province.

Blackstone and the Government of Singapore Investment Corporation (GIC) are also steadily investing in physical logistics center assets in Korea. With companies such as Heinz, Phoenix, Blackstone, and KKR scheduled to participate in assets currently under transaction, the high level of interest from foreign investors is expected to continue for the time being.

Cold-chain Logistics: ‘Bargain-Price Sales’ Due to Vacancies and Auction Sales Persist

Large-scale core assets have driven the recovery in transactions. Last year, the number of transactions involving large logistics centers with a gross floor area of 99,000 square meters (approximately 30,000 pyeong) or more reached a record high of nine on an annual basis.

In particular, the Cheongna Logistics Center—a prime-grade asset with a gross floor area exceeding 430,000 square meters—became the first domestic logistics center transaction to surpass 1 trillion won. Analysts note that, even amid market uncertainty, institutional investors are concentrating their capital on high-quality assets with strong lease stability.

Starting in the second half of last year, participation by domestic pension funds and institutional investors has been gradually increasing. Transactions in the second half of last year included numerous pension funds—such as the Public Officials’ Mutual Aid Association, the Private School Teachers’ Pension Fund, and the Firefighters’ Mutual Aid Association—as well as domestic securities firms and insurance companies.

Incheon’s “Arenas Yeongjong” garnered attention as a project in which the National Pension Service (NPS) invested. Furthermore, the NPS is reportedly in the process of acquiring the Seongeun-ri Logistics Center in Anseong, indicating that domestic institutions are making a full-scale return to the logistics center sector.

In contrast, cold-storage logistics centers continue to face challenges. Most assets currently traded in the market are ambient-temperature logistics centers or assets with a high proportion of ambient-temperature space. As the burden of vacancies remains high for cold-storage facilities, there is a growing trend of converting them to ambient-temperature use to enhance their competitiveness in the leasing market. This trend is expected to continue for the foreseeable future.

Transactions through public auctions and judicial sales are also continuing steadily. Last year, the prices of logistics center assets traded through public auctions and judicial sales were approximately 17.9% below the market average.

Currently, about 10 logistics centers are listed for sale in the public auction market, most of which are assets held by developers that failed to sell after completion. In particular, many of these assets have a high proportion of cold-storage facilities, and some consist entirely of cold-storage facilities, making them difficult to sell, according to analysis.

An official from Colliers Korea stated, “Despite a recovery in transaction volume, investment criteria for logistics centers in the Seoul metropolitan area are becoming even more stringent,” adding, “Amid ongoing interest rate pressures and vacancy risks, the polarization between large-scale core assets and cold-storage and non-prime assets is likely to intensify in the future.”