The Chungcheong region is where most of the logistics centers are located along the Gyeongbu and Jungbu highways. The logistics area has increased by about 120% from 2019 to 2024. In particular, about 70% of the new supply is concentrated in the Cheonan, Eumseong, and Jincheon areas.
Logistics development in the Chungcheong region has been in full swing due to high land prices and a shortage of development land in the SMA, but business performance has deteriorated, resulting in an increase in the number of sites on hold. At the end of '24, only 9% of the potential development volume (2,166k py) had been started. New supply is concentrated in the Cheonan, Sejong and Cheongju regions. It has a high proportion of proprietary centers such as Daiso Sejong Hub Center and Woongjin Food Yugu Logistics Center.
Due to the location of many industrial complexes, logistics centers of manufacturing companies occupy the most space, followed by 3PLs, e-commerce, and couriers. Manufacturing companies such as Hyundai Mobis, P&G Korea operate logistics centers near their manufacturing bases, and there are many logistics bases of 3PL companies such as JS Distribution and LX Pantos. Also, e-commerce fulfillment and delivery bases of Coupang and Kurly in Daejeon, Sejong, and Cheonan area, and there are many courier terminals of 3 major domestic courier companies.
Like the Korean logistics real estate market, the U.S. industrial real estate market is also suffering from oversupply. The COVID-19 led to a surge in logistics demand as online marketplaces grew, and the development of new logistics centers increased sharply, peaking in Q3 '22. Since then, development has been in full swing, resulting in a surge in new supply, but the impact of interest rate hikes and rising costs has led to a decline in demand and an increase in vacancy rates, which is very similar to the recent logistics real estate market in Korea.
Fulfillment centers, which drove logistics demand during the COVID-19, have seen some decline in demand due to slowing e-commerce growth post-pandemic. However, the U.S. industrial real estate investors expect new logistics demand to be complemented by new types of assets such as manufacturing, flex, etc. Trump's increased tariffs are expected to drive manufacturing plants back to their home countries, increasing demand for manufacturing facilities and flex assets. This continues to support a favorable investment outlook for industrial assets.
The positive trend in the industrial and logistics market in the U.S., a major global real estate investment destination, is expected to continue as foreign real estate asset managers based in the U.S. are actively investing in the Korean logistics market. As the logistics demand for manufacturing, storage and distribution functions in the global economy is expected to increase, it is expected that Chungcheong’s logistics market will recover quickly.
