Korea new logistics supply to hit 1.75m sqm this year

The Seoul Metropolitan Area will account for around 1.4m sqm of new supply.

South Korea’s logistics sector is set for continued supply constraints and steady investment in 2026, according to Savills Korea. Nationwide new logistics center supply is projected at 1.75 million sq m, with the Seoul Metropolitan Area accounting for roughly 1.40 million sq m. Regulatory changes in Gyeonggi-do, including stricter zoning, height, and width limits, are expected to further restrain new development activity.

Despite tighter supply, Savills noted that cold storage vacancy remains elevated at around 30%, prompting developers to reduce cold allocations or convert them to dry storage. Savills noted that approximately 220,000 sq m of cold storage space under construction has already been repurposed for dry use.

Leasing demand is expected to remain robust, fueled by e-commerce growth and delivery operators’ investments in speed and service, with dry storage face rents projected to rise by about 3% in 2026, according to Savills data.

Investment activity will remain focused on stabilized prime assets, mirroring 2025 trends. Notable transactions in progress include the Shinsegae HUB Logistics Center in Pyeongtaek, CBRE IM’s portfolio, and the Incheon Dohwa Logistics Center, reflecting continued foreign and domestic institutional interest. Savills forecasts cap rates for best-in-class logistics assets to compress modestly to around 5%.