Yeoju Ganam Logistics Center

The Yeoju Ganam Logistics Center is due for completion in late 2022 or 2023

AEW Capital Management has acquired a $538.2 million portfolio of Greater Seoul warehouses to mark its first logistics investment in South Korea, the US-based real estate fund manager said late last week.

Through a forward purchase deal, the asset manager said it acquired the four building Yeoju Ganam Logistics Centre and the nine-storey Incheon Wonchang-dong Logistics Centre as it expands its Asia Pacific footprint and seeks to feed a growing appetite for logistics space in the region.

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“We are proud to present our first logistics investments in South Korea,” said Michael Moon, AEW’s Country Manager for Korea. “This acquisition represents a unique opportunity to purchase two large-scale, mixed-use logistics facilities that are strategically located to major transportation networks,”

AEW, which in September closed on $1.54 billion in funding for its fourth APAC value-add fund, declined to provide further details on the deal, however, Mingtiandi has been able to identify the sellers of the two projects, which are due for completion in late 2022 or early 2023, with local investment firm Pebblestone Asset Management developing the Incheon Wonchang-dong Logistics Centre and Am Plus Asset Management developing the Yeoju Ganam Logistics Centre.

Greater Seoul in Style

One of the top targets of AEW’s new VIA IV fund is logistics, and for its second acquisition in the sector regionally, following its A$117.7 million ($87.2 million) purchase of a pair of Australian warehouses last month, AEW is adding a total of around 280,000 square metres (3 million square feet) to its nascent shed portfolio.

Jason Lee, Managing Director, CIO and Senior Portfolio Manager, APAC, AEW

AEW chief investment officer for Asia Pacific Jason Lee

The 154,000 square metre Yeoju Ganam Logistics Centre is located in Gyeonggi province southeast of Seoul and is accessible via main transport networks like Yeoju JC, a highway junction connecting major satellite cities in the Greater Seoul area.

The second asset is the 124,692 square metre Incheon Wonchang-dong Logistics Centre located in the Wonchang-dong area of Incheon’s Seo-gu district. AEW expects the 9-storey facility’s location near South Korea’s main port west of Seoul, to provide connectivity advantages, with the potential for also serving as a last-mile delivery hub for the Seoul area.

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AEW said the target tenants for the two properties, which provide a mix of cold and dry storage floors, include third party logistics (3PL) providers and corporate users needing distribution centres.

“With growing leasing demand from e-commerce players and 3PL operators with nationwide distribution needs, these assets should benefit from the current and projected market fundamentals of the logistics sector in South Korea,” said Jason Lee, AEW’s chief investment officer for Asia Pacific. “We believe it is a great opportunity to gain exposure to a sector with strong demand projections coupled with steady rental growth.”

APAC expansion

AEW first entered Asia Pacific’s logistics market last month when it acquired a stabliised logistics facility in Dandenong South, southeast of Melbourne’s central business district as well another mature asset in Edinburgh Parks, an industrial suburb north of Adelaide.

wonchang dong

The Incheon Wonchang-dong Logistics Centre

The 40-year-old asset manager, which has $88.6 billion in assets under management globally, said both properties were already 100 percent pre-leased for a 15-year term.

In addition to its deals in Australia and South Korea, AEW has also been pursuing industrial opportunities in Hong Kong, with the firm agreeing in August to purchase a 50 percent interest in 18 Lee Chung Street in the city’s Chai Wan area from Hanison Construction for HK$305 million ($39.1 million).

Logistics on the Rise

AEW’s logistics deals are part of a wave of cash gushing into South Korean sheds, with PGIM Real Estate just last week having teamed up with Singapore’s CapitaLand Investment to acquire two cold storage centres in the north Asian nation for KRW 127.1 billion ($110 million).

The joint venture, in which PGIM holds a 95 percent stake, bought the 24,606 square metre Foodist Icheon Centre in Gyeonggi province and the 8,716 square metre Foodist Gyeongin Centre near the Pyeongtaek-Dangjin port from local buyout firm VIG Partners.


A September report by AEW Research showed demand for South Korean logistics space remains strong, thanks to support from the country’s thriving e-commerce market.

“Occupied stock is 1.5 times larger by mid-2021 than two years prior and vacancy rates are low,” the report read. “Looking forward, logistics stock will double in size from 2021 to 2023, deepening the base of institutional quality assets, benefiting both occupiers and investors.”

Thanks to builders ramping up the construction of modern sheds since 2012, AEW Research estimates the stock of grade A warehouse space in the Greater Seoul area will likely hit 168 million square feet by next year, which is equal to two-thirds of the total volume in Tokyo.

AEW predicts that, in terms of returns, Greater Seoul will likely join the top three highest performing logistics markets in 2021-2024, with the market having already notched more than a record $2 billion in transactions so far this year.

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