Online Sales Growth

Online retail sales grew a remarkable 7% YoY in 2020-YTD, while total retail sales increased 1% during the same period. The shift from offline to online retail is rapidly materializing, as online retail sales, only 17% of the total in 2017, rose to 27% in Q1-Q3/2020. 

By product category, Food & Beverages exhibited the most significant growth in sales. On the effects of the pandemic-related lockdown, online sales of Food & Beverages rose 48% YoY, and Agricultural & Livestock Products by 71% YoY. As a result, high demand for cold storage has fostered more investment interest in cold storage developments in 2020.

Supply

In Q3/2020, total stock of logistics centers exceeding 5,000 pyeong GFA in the Seoul Metropolitan Area (“SMA”, comprising of Seoul, Gyeonggi and Incheon) is estimated at 4.8 million pyeong. The pace of new supply additions, averaging 19% annually 2017-2019, is projected to slow to 14% during 2020-2022.

While current supply is concentrated in Icheon/Yongin/Gwangju, districts that are preferred by occupiers due to their proximity to Seoul, expected future supply is dispersing to other districts due to difficulties in obtaining new approvals in the traditional three districts. Heightened demand from E-commerce and 3PL occupiers is driving the rise in the number of new approvals.