Seoul’s 2025 industrial supply to underperform 2024 totals

This year’s supply is expected to be only less than a third of last year’s supply.

Seoul’s industrial supply in H2 2025 is expected to be similar to H1 2025, with annual supply projected to be less than one-third of 2024’s supply, according to a recent report from JLL. Effective rents are expected to record a moderate increase, with last-mile centres potentially seeing higher rent increases.

“As market liquidity increases, expectations for an active investment market are growing. With a gap between seller and buyer expectations, only selective properties may close deals. For core assets in prime locations, the risk premium on borrowing costs has decreased,” the report said.

Here’s more from JLL:

In Q2, the net absorption in the SCA Grade A market recorded 68,500 pyeong, marking the lowest level since Q3 2020. The North’s net absorption reverted to negative upon the departure of an anchor tenant, while other centres saw muted leasing activity.

The South recorded the highest net absorption, with new tenants including 3PL, interior and apparel companies moving in. The Central welcomed new tenants such as e-commerce, recording a net absorption of 21,300 pyeong in the quarter, the highest in 10 quarters.

Supply decrease becomes very noticeable in the first half of the year

Four new logistics centres were supplied, with one centre being supplied in each submarket except the West. This recorded the lowest supply volume in 15 quarters. The West, which recorded the highest supply last year, did not see any new supply in H1 2025.

The SCA vacancy rate remained at 16.4%. The vacancy rates in the Central, South and West decreased, while those in the North and South-east increased. Newly supplied centres in the North remained entirely vacant, leading to a significant increase in the vacancy rate.

The SCA logistics cap rate maintains the same level as the previous quarter at 5.3%

Net effective rent recorded KRW 32,000, up by 1.1% q-o-q. Rents in all submarkets increased, with the Central showing the highest increase at 3.1% q-o-q as newly supplied centre in prime location offered rent higher than the market average.

The logistics investment market was quite subdued, recording KRW 385 billion in transaction volume. The most notable deal was the Gyeongsan Coupang Logistics Center, sold by Value Corporation to IGIS Asset Management for KRW 155.8 billion.