M&G Real Estate, a financial solutions providers for real estate investors, has acquired a US$131 million (155.5 billion South Korean won) modern logistics centre close to Seoul on behalf of its core Asian property strategy managed by Richard van den Berg. This is the second logistics facility for the M&G Asia Property Fund in Korea after Homeplus Hub Logistics Centre, the 64,250 sqm distribution centre acquired in 2017.
This purchase coincides with an uptick in consumer spending with expectations for online retailing to grow in Asia-Pacific markets from 14% to 23% by 2023. As the logistics sector matures and attracts more interest from investors, spreads between logistics and other asset classes in developed markets have narrowed and Korea is expected to follow the demand for modern well-located facilities.
Located south of Seoul, Yongin Baegam Logistics Centre is in an established logistics cluster close to the city’s major highways. The circa 100,000 sqm four-storey asset comprises all the characteristics of a high specification logistics centre, catering for all the demands of modern occupiers. The new building tenants include established third-party logistics operators and retailers.
Richard van den Berg comments: “We are positive about the fundamentals in Asia-Pacific’s logistics sector, particularly in Korea, where supply is limited and demand is strong. The relentless demand for faster delivery will push third-party logistics companies to larger, more centralized distribution centres near key transport hubs and highway interchanges, such as ours.”
“Location will remain a key requirement as transportation typically accounts for at least half of logistics providers’ total costs. Yongin Baegam Logistics Centre is well positioned to benefit from this trend and will be a valuable addition to our strategy and will provide stable and core income to our investors.”