The term “logistics” originates from military supply chains—operations that, while not visible on the front lines, ultimately determined the outcome of wars through speed and precision of support.

Modern logistics centers play a similar role in today’s economy. Operating behind the scenes, they are critical infrastructure that consolidates the entire process of delivering goods to end consumers. As such, they have evolved into essential hardware that directly impacts corporate efficiency and service competitiveness. Unlike other commercial real estate sectors that are highly sensitive to short-term trends, logistics assets have established themselves as a distinct asset class characterized by stability and long-term fundamentals.

As the strategic importance of logistics centers continues to rise, structural changes in the logistics real estate market are also accelerating. The transition in supply-demand cycles, intensifying competition within the logistics ecosystem, and the resulting shift in investment paradigms all signal that the market is entering a new phase.

Market Reawakening: Logistics Real Estate Regains Momentum

According to IGIS Asset Management’s Strategy & Research Division, Korea’s logistics center transaction volume peaked at approximately KRW 6.5 trillion in 2022 before declining, but rebounded to around KRW 5.2 trillion in 2025 (YoY +92.9%), indicating a partial recovery.

Following rapid expansion driven by the surge in online shopping during COVID-19 and subsequent contraction due to rising interest rates in 2022, the market in 2025 has begun to stabilize. Logistics assets secured by high-credit tenants and mid- to long-term lease agreements have successfully renewed contracts, reducing uncertainty. In particular, prime logistics assets in strategic locations continue to attract foreign capital, supporting a gradual recovery in investor sentiment.

Fundamentals of domestic logistics demand remain robust. Korea’s online penetration rate has increased from below 30% pre-pandemic to approximately 34% as of Q3 2025—one of the highest levels among major economies (IGIS Strategy & Research).

Total online retail transactions reached KRW 272.0 trillion in 2025, marking a 4.9% year-over-year increase and a record high (Ministry of Data and Statistics, December 2025). This significantly outpaces the national GDP growth rate of 1.0%, reinforcing the view that logistics infrastructure demand continues to expand structurally alongside digital consumption.

Supply Cliff Creates Opportunity: The Beginning of Rebalancing

On the supply side, the logistics market is undergoing a clear cyclical shift. In 2023, new supply reached approximately 6.2 million ㎡ (up ~71% YoY), marking the highest level on record and triggering a shift in market dynamics (IGIS Strategy & Research).

However, following the Russia–Ukraine war, rising raw material costs and global monetary tightening have significantly curtailed new development projects.

According to CBRE’s “2026 Korea Commercial Real Estate Market Outlook,” new logistics supply is projected to decline to approximately 860,000 square meters in 2026—the lowest level in the past decade. This figure is estimated to be less than half of the net absorption recorded in 2025. Under such constrained supply conditions, vacancy risks are expected to gradually ease, suggesting a more favorable supply-demand balance ahead.

A New Frontline in the Logistics Infrastructure Race

Competition in the logistics sector has evolved beyond delivery speed into a full-scale race for infrastructure dominance. Major e-commerce and logistics players are strengthening long-term competitive advantages through nationwide logistics networks, automation, and data-driven operations.

Coupang: Infrastructure Leadership

Since launching its Rocket Delivery service in 2014, Coupang has built a nationwide logistics network through continuous investment. Its membership growth and valuation—once exceeding KRW 100 trillion at IPO—highlight logistics assets as a core driver of corporate value. More recently, the company has enhanced automation capabilities while pursuing asset securitization through REITs, creating a reinvestment cycle that further strengthens its infrastructure edge.

Platform Alliances and the Rise of C-Commerce

Naver is reinforcing its commerce ecosystem through initiatives such as Naver Plus Store and partnerships with Kurly, while also expanding logistics capabilities to support marketplace sellers. At the same time, Chinese e-commerce platforms such as Temu and JD.com have accelerated their entry into Korea since 2024, intensifying competition for domestic logistics hubs and last-mile networks.

Advancement of 3PL Players

CJ Logistics has introduced seven-day delivery services, such as “Everyday Delivery,” while advancing smart logistics through automation and data-driven systems. Lotte Global Logistics is partnering with Ocado—an AI-based logistics platform adopted by Lotte Shopping—to enhance demand forecasting, inventory management, and delivery efficiency.

A New Investment Paradigm in Logistics

As competition intensifies among e-commerce platforms and third-party logistics providers, the investment approach to logistics real estate is undergoing a fundamental shift.

Logistics investment is no longer confined to traditional real estate metrics; it is increasingly viewed as strategic capital deployment to secure infrastructure and network dominance. While past investment decisions focused primarily on the yield of individual assets, future strategies must take a portfolio and network-oriented perspective.

Key considerations now include the role of each asset within the broader logistics network, its locational significance, and its contribution to last-mile efficiency.

Ultimately, the value of logistics investment lies not only in the performance of individual assets, but in the strategic role those assets play within the logistics ecosystem. IGIS Asset Management continues to redefine logistics investment standards through a dual focus on portfolio allocation and network efficiency.

Written by Seunghoon Lee, Head of Part 4, Business Group

Structured & Edited by Soyeong Park, Brand Communications Manager

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