Aegis Asset Management: "Logistics Real Estate Market to Expand Due to E-commerce Growth"

[Asia Economy Reporter Minji Lee] Aegis Asset Management forecasted that the logistics real estate market will continue to boom in the short term due to the growth of the domestic e-commerce market.

According to Aegis Asset Management Research Center on the 16th, the domestic online shopping transaction volume has recorded an annual growth rate of about 20% since 2017, and parcel delivery volume has also significantly increased.

The report projected that demand will greatly increase in the short term due to the expansion of the e-commerce market in Korea. Excluding the approximately 940,000 pyeong of planned new supply in the metropolitan area and Cheonan region this year, it analyzed that an additional 400,000 to 500,000 pyeong of e-commerce logistics centers will be needed annually until 2025. However, regarding the mid- to long-term outlook, it anticipated that technological advancements and market contraction due to population decline will pose risks, likely causing market slowdown.

Furthermore, the report noted that since logistics characteristics vary by country and company, simple comparisons are difficult. However, with the future introduction of technologies such as robots and A.I. (Artificial Intelligence), the volume of parcels that can be processed is expected to increase, significantly improving efficiency. As a result, the logistics center area required to handle the same volume of parcels will gradually decrease.

Regarding logistics delivery network strategies, it explained that Korea, with its population concentrated in the metropolitan area, is likely to rapidly establish a logistics delivery network, and thereafter, last-mile centers in urban areas will become larger hubs. In the case of China, it introduced that it has the highest e-commerce penetration rate worldwide, with a standardized delivery network and world-class logistics center technology. For the United States, although e-commerce penetration in the traditional retail market was not high, the market expanded due to the impact of COVID-19, leading to a significant increase in sales, and recently, demand for logistics centers in the U.S. has surpassed supply.

This content was produced with the assistance of AI translation services.