【世邦魏理仕CBRE】2024韩国物流枢纽釜山A级物流市场概况与展望报告

IntelligentInvestment

Korea'sLogisticsHub:

BusanGradeALogisticsMarketOverviewandOutlook

REPORT

CBRERESEARCHDECEMBER2024

InteligentInvestmentKorea'sLogisticsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

Introduction

Geochang

Hamyang

cnonopcn

Miryang(

GYEONGSANGNAM-D0

Sancheong

BUSAN

Homan

GimhaeILci

Jinju

Hadong

山

Goseong

NewPort

Expressway

一Namhae

JoongbuNaeryuk

一JoongangGyeongbu

-Donghae

一OuterRing

Hapcheon

Uinyeong

Yongo/

Ssacreon?

NathPot

ULSAN

Geoie

29vn

LocatedonthesouthernmosttipoftheKorean

peninsula,BusanisKorea'ssecondlargestcityandthecountry'slargestportcity.Busanplaysapivotalroleinthecountry'simportandexporteconomy.Withits

enormouslogisticscapacity,BusanPortunderscoresthecity'saccessibilityandefficiencyasalogisticshub.

BusanisadjacenttoGyeongsangnam-do(Gyeongnam)andUlsan,whichtogethercomprisetheBuulgyeong

region,thelargestsinglelivingareainKoreaafter

GreaterSeoul.Buulgyeongishometoastrong

consumermarketandsolidindustrialbase,makingitanextremelycompetitivelogisticscentre.Theareaboastsexcellentconnectivitybetweenitscities,maximisingtheefficiencyoflogisticstransportationnetworks.

Changwon,Gimhae,andYangsaninGyeongsangnam-doaremajormanufacturingcentresinKorea.TogetherwithBusan,theyformamajorlogisticshub.ThisreportbyCBREfeaturesanin-depthstudyoftheBusan

logisticsmarket,analysingitscurrentstatusandfuturegrowthpotential.

Buulgyeongishometo15%ofKorea'spopulation

00

oo

O

000

GreaterSeoul(23,181,000)

O000

ooo

Buulgyeong(7,657,000)

Buulgyeongaccountsforabout14%ofKorea'sGDP

GyeongnamandBusanrank2ndand4hinRegionalGDP(excludingSeoulandGyeonggi)

■Seoul

■Gyeonggi

■Busan

■Ulsan

■GyeongnamOthers

Buulgyeong14%

5%4%5%

23%

25%

38%

Note:Basedon2022

ThelargestshareoftheBuulgyeongpopulationworksinmanufacturing(22%)

andF&B

Note:Basedonnumberofemployees;Healthcareindustryincludessocialservices

Source:KOSIS,December2024

2CBRERESEARCH◎2024CBRE,INC

InteligentInvestmentKorea'sLogistcsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

BusanGradeALogisticsMarket

7:3

Proportionofdry&coldspace

Gapinvacancyratebypropertytype

DryCold

12%24%

GradeALogisticsMarketStock

1,932,451sq.m.

9%ofthesizeoftheGreaterSeoulGradeALogisticsMarket

15.7%

Increaseinvacancyratesduetonewsupply

Avg.YearofCompletion

2020

Dryrents

kRw29,652

perpyeong

V15%comparedtoGreaterSeoul

Busan'slogisticsmarkethas

formedaroundWest&North

HalfofGradeAassetsarelocatedinBusanJinhaeFreeEconomicZone(BJFEZ)

Note:GFAlargerthan33,000sq.m.basedonQ32024

3CBRERESEARCH◎2024CBRE,INC

InteligentInvestmentKorea'sLogistcsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

Contents

01Background

02supplyandOutlook

03LeasingandInvestmentTrends

2024

4CBRERESEARCH◎CBRE,INC

01

Background

IntelligentInvestmentKorea'sLogisticsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

6CBRERESEARCH◎2024CBRE,INC

Busan'slogisticsmarketgrowsonsolidporthinterlanddemand

BusanPort,thelargestportinKorea,istheworld'ssecond-largest

transshipmentportandseventh-largestcontainerportintheworld.Itis

responsiblefor78%ofKorea'stotalcargovolumeandservesasthecentreofmaritimetradeinNortheastAsia.

ThePortofBusanconsistsofNorthPort,SouthPort,GamcheonPort,

DadaepoPort,andNewPort.WhiletheexistingNorthPorthasplayedapivotalroleasaninternationaltradeport,ithasbecomesaturatedwithincreasingcargovolumes,leadingtothedevelopmentoftheNewPortin1997.SincetheopeningofBusanNewPortin2006,thevolumeofcargofromtheNorthPorthasbeengraduallytransferredtotheNewPort,with70%ofBusanPort'stotalcargonowhandledattheNewPort.

ThegrowthofBusanPorthasspurredinfrastructureinvestmentandtheexpansionoflogisticsfacilitiestoincreasetheefficiencyofportlogisticsoperations.BusanPortisfurtherstrengtheningitspositionasadomesticlogisticshubbyprovidingavarietyoflogisticsservicessuchas

transshipment,customs,containerhandling,andtransportation.

ExportscomprisethelargestproportionofcargohandledatBusanPort.AsGyeongnamandUlsanarehometolarge-scalemanufacturingindustriessuchasmetal,machinery,andautomobiles,thereisahighlevelofexportactivityinvolvingrawmaterialsandfinishedproductsrelatedtothese

industries.Thelargevolumeofproductscreatedbythesemanufacturing-basedindustrieshasservedasthemainunderlyingsourcedemandfortheBusanlogisticsmarket.

Figure1:ContainerCargoThroughputbyPort

GwangyangPort

6%

Pyeongtaek/

DangjinPort

3%

UlsanPort

1%

Incheon

Port

12%

NewPort55%

North

Port

23%

BusanPort78%

Source:KoreaInternationalTradeAssociation,2023Dbasedon2023levels

Figure2:BusanPortcargovolumebycategory

Unit:USDbillion

CAGR10%

250

(2020-2023)

200

150

100

50

0

2019

20202021202220232024.09

■Machinery■Chemicals■ElectronicsSteelandMetal■Others

Note:Othersincludeplastic,rubberandleather,fiber,agriculture,etc.

Source:KOSIS,December2024

InteligentInvestmentKorea'sLogistcsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

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DevelopmentofBusanJinhaeFreeEconomicZone(BJFEZ)andotherindustrialparksledbygovernment

In2003,theKoreangovernmentestablishedtheBusanJinhaeFree

EconomicZone(BJFEZ)comprisedoffivedistricts,withtheaimof

cateringtogrowingdemandfromnewportsandpromotingregional

economicdevelopmentthroughforeigninvestmentandcreatingindustrialclusters.

TheBJFEZhascontributedtothedevelopmentofBusan'slogisticsmarketbycreatingafavourableenvironmentforthedevelopmentoflogistics

facilitiesthroughtheprovisionofvariousbenefitssuchastaxreductions,deregulation,andinfrastructuresupport.

TheexpansionoftheBJFEZinthecomingyearsisexpectedtofurther

boostthedevelopmentoftheBusanlogisticsmarket.GadeokdoNew

AirportandJinhaeNewPortareplannedtobecompletedin2029and

2040,respectively.Onceopen,thetwoschemesareexpectedtohavea

synergisticeffectonthelogisticshubbyconnectingtoNewPort.In

responsetogrowingdemand,thegovernmentannouncedinJuly2024

thatthefreeeconomiczoneinGyeongnamwouldbeexpanded:ameasureexpectedtofurtherpromotetheexpansionoftheBusanlogisticsmarket.

ThegovernmentcontinuestocreateindustrialcomplexestomaximisetheformationofindustrialclustersandsynergiescreatedbytheconcentrationofvariousmanufacturingindustriesintheBusanarea.AsofNovember

2024,thereare25and64industrialcomplexesinBusanandGyeongnam,respectively.Approximately61%ofupcomingGradeAlogisticssupplywill

Figure3:BusanJinhaeFreeEconomicZone(BJFEZ)SitePlan

*Othersincludemanufacturing,R&D,andrenewableenergyindustriesSource:BusanJinhaeFreeEconomicZone,2024

No.ofGradeAassetNo.offuturesupply

BJFEZDevelopmentbyUse

Advanced

InternationalManufacturingBusiness

Others

Logistics54%

Completed

42%Inprogress

55%

Planned,2%

bedevelopedinindustrialparks.

InteligentInvestmentKorea'sLogistcsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

8CBRERESEARCH◎2024CBRE,INC

Logisticssupplychainenhancedbynewtransportationinfrastructure

InadditiontoBusanPort'slargecargocapacityandgovernmentalpolicysupport,thedevelopmentofamajorregionaltransportationnetworkhasaugmentedBusan'sroleasalogisticshub.

TheGyeongbuExpressway(一),alsoknownasthe“ArteryofSouthKorea”connectsBusanandGreaterSeoul.Theroutehasbecomeanimportant

componentofanefficientlogisticssupplychaintransportingimportandexportcargotoSeoul.Thehighwayhandlesanaverageof28,000freight

vehiclesperday,thehighestvolumeofanyhighwaypassingthroughtheBusanarea.

TheJoongbuNaeryukExpressway(一)isanothermajortransportationnetworkthatrunsfromBusantoGreaterSeoulandhelpsalleviatetrafficontheGyeongbuExpressway.Withfreightvehiclesaccountingforabout35%ofitstotaltraffic,theExpresswayservesasthebackboneofKorea'sinlanddeliverynetworkforimportandexportgoodsalongwiththe

GyeongbuExpressway.

TheBusanOuterRingExpressway,whichopenedin2017,connectswiththeNamhae,Jungang,Gyeongbu,andDonghaeExpresswaystofacilitatemovementbetweenBusanandGyeongnamandcontributestoimprovingtrafficflowbyincreasingconnectivitybetweenroads.

InSeptember2024,theKoreangovernmentannounceditwouldinvest

KRW15trillionby2030toexpandtransportationinfrastructureinthe

easternregion,furtherenhancingtheefficiencyofBusan'slogisticssupply

Figure4:MajorTransportationInfrastructureandGradeAAssets&averagedailytrucktraffic(2018-2023)

ONo.ofGradeAAsset

一NamhaeExpressway

一JoongbuNaeryukExpressway

一JoongangExpressway

一GyeongbuExpressway—DonghaeExpressway

一OuterRingExpressway

GimhaeuBusoninsoonge

20182023

NamhaeOuterRingGyeongbuJoongbu

RoadNaeryuk

Unit:vehicleperday

Source:KOSIS,December2024

chain.

02

SupplyandOutlook

InteligentInvestmentKorea'sLogistcsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

10CBRERESEARCH◎2024CBRE,INC

BusanGradeALogisticsMarket

CBRE'sdefinitionoftheBusanGradeAlogisticsmarketincludesfacilitieswithaGFAof10,000pyeongorlargerandlocatedinfivedistricts:West,North,Northwest,CentralandEast.

1

WestGangseo-gu,Busan|Jinhae-gu,Changwon

·Thelargestandmostactivemarket,adjacenttoBusanNewPort

·GradeAlogisticsassetsarelocatedinDudong,NewPort,andJisadistrictsinBJFEZ

2

NorthYangsan|Daedong-myeon,Sangdong-myeon,Gimhae

·AsatransportationhubwheretheGyeongbu,Jungang,andBusanOuterRingExpresswayintersect,theNorthpossessesanexcellentgeographicaladvantagefortransportinggoodstoSeoul

3

NorthwestJinrae-myeon,Joochon-myeon,Jinyoung-eup,Gimhae

·ThedistrictboastsexcellentaccesstotheBusanOuterRingExpresswayandNamhaeExpressway

·FuturesupplywillbecentredaroundindustrialparksclosetoJinryeStationwhichconnetstotheNewPort

4

5

CentralSeo-gu,Saha-gu,Sasang-gu,Nam-gu,etc,Busan

·Idealforsecuringmanpowerandservingasalast-milebaseduetoitsproximitytodowntownBusan

·Logisticssitesaredifficulttosecureowingtothelimitedavailabilityofindustrialparkscomparedtootherregions

EastGijang-gun,Busan

·OfferseasyaccesstoUlsanviatheDonghaeExpressway,yetsupplyinpipelineislimited

DistrictNo.ofAssetsMarketSize(GFA)

West1552% North835% Northwest17% Central14%

East12%

InteligentInvestmentKorea'sLogistcsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

Anascentlogisticsmarket

thatstartedtoexpandin2019

WhileBusanwashometonumeroussmallandmedium-sizedlogistics

assetsforsometime,thesupplyofGradeAlogisticsfacilitywasnotablestartingin2019.Theexpansionoftransportationnetworksandthe

creationofindustrialparkshavebeenmajorfactorssupportingthegrowthofBusan'sGradeAlogisticsmarket.

TheWestiscurrentlythelargestGradeAlogisticsdistrict,withalargevolumeofstockfocusedontheBJFEZ.TheopeningoftheBusanOuterRingExpresswayin2017spurredtheexpansionofsupplytonewareas,suchastheNorthwestandCentralregion.NewsupplyintheNorth,thesecondlargestmarket,hasbeenparticularlystrongin2024.

RecentyearshaveseenanevolutionintheuseofGradeAlogistics

facilities,withthemarketpreviouslydominatedbyend-usersutilising

propertiesforself-use.Morerecently,thecity'sGradeAlogisticsmarkethascometobecomprisedofleasableassetsownedbyassetmanagementcompanies:atrendthathasboostedtheinvestmentappealoftheBusanlogisticsmarket.

DBasedonQ32024

Northwest

2024

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InteligentInvestmentKorea'sLogistcsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

Newsupplysetsrecordhighin2024;averageassetsizecontinuestogrow

TheBusanGradeAlogisticsmarketcomprises26assetstotaling1.9millionsq.m.(580,000pyeong)D.Thisisabout9%ofthetotalGradeAlogistics

marketinGreaterSeoul,andlessthanhalfthesizeoftheIcheonlogisticsmarket,whichisthelargestsubmarketinGreaterSeoul.

SevennewGradeAlogisticsfacilitiesprovidingatotalof678,175sq.m.ofspacehavebeencompletedsofarin2024.Twoadditionalassetsare

scheduledforcompletioninQ42024,oneintheEastandtheotherintheNorth,providingatotalof264,361sq.m.Thiswillensurenewsupplyfor2024growsby75%y-o-y,reachingthehighestannualvolumeonrecord.

AmajorfactorcontributingtothesteadygrowthofBusan'sGradeA

logisticsmarkethasbeenthedevelopmentoflarge-sizedassets.Withthesupplyoflargeassetswithagrossfloorareaof30,000sq.m.ormore

becomingincreasinglyprominent,theaverageGFAofasingleassethasincreasedbyabout62%,risingfrom60,000sq.m.in2021-2023to97,000sq.m.in2024.

OnenewlogisticspropertycurrentlybeingdevelopedintheEasternregionbyadomesticassetmanagerisexpectedtobearound176,000sq.m.ThiswouldmakeitthelargestprimeassetintheBusanlogisticsmarket,

surpassingthecurrentlargestproperty,DaisoBusanHubCentre,uponitscompletionattheendofthisyear.However,newsupplyisexpectedto

declinein2025.

Figure6:BusanGradeALogisticsSupply

Unit:1,000sq.m.

10

2,500

9

8

2,000

7

6

1,500

5

4

1,000

3

2

500

1

0

0

20202021

202220232024F2025F

20152016201720182019

●No.ofnewsupply(RHS)

■Existingsupply(LHS)■Newsupply(LHS)Note:Numbersabovebarsrepresentnumberofnewassets.

Source:CBREResearch,Q32024

■West

■North

Northwest

■Central

■East

Avg.GFA

2024

96,882sq.m.

62%

2021-2023

61,083sq.m.

1BasedonQ32024

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InteligentInvestmentKorea'sLogistcsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

13CBRERESEARCH◎2024CBRE,INC

Logisticsmarketconcentratedinwestandnorth;vacancyratereaches16%

Bytotalsupply,thesizeoftheBusanGradeAlogisticsmarketbyregioninBusanisasfollows:West,North,Northwest,Central,andEast.Owingto

solidport-relateddemand,about87%ofGradeAassetsinBusanare

concentratedintheWestandNorthareasadjacenttoBusanNewPort.TheNorthwesternandCentralareasaresmallermarketsthathaveonlyjuststartedtoexpand.

AsofH12024,theaveragevacancyrateinBusan'sGradeAlogistics

marketwasaround16%.TheWesthasseensoliddemand,withallassetsreporting100%occupancy,whiletheNorthhasseenrapidstabilisation,registeringavacancyrateof9%despitetheadditionofsignificantnewsupplyin2024.

VacancyremainshighintheNorthwestandCentralregions,particularlyinthecoldsegment.Whilenewlysuppliedassetshavebeennegotiatingwithpotentialtenants,elevatedvacancyappearstobeatemporary

phenomenon.

Byassettype,mixedandcoldtypepropertiesarethemostprevalentat

around65%,whilepuredryandcoldfacilitiesaccountfor31%and4%,

respectively.CJLogistics'BusanStarbucksCentre,builtin2022,isthe

onlypureGradeAcoldstoragefacilityinBusan.Withmorethan90%

Korea'simportedcoffeebeansflowingthroughBusan,thisassethas

quicklystabilizedbysecuringCJLogisticsasatenant.ThecentreplaysanimportantroleinmaintainingthefreshnessandqualityofStarbucks

products.

■West

■North

Northwest

■Central

■East

Source:CBREResearch,Q32024

InteligentInvestmentKorea'sLogistcsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

14CBRERESEARCH◎2024CBRE,INC

Largebacklogoffuturesupplybutslowrateofcompletionsexpected

Aftersupplypeakedin2023,thevacancyrateintheGreaterSeoulreacheddoubledigitsandhasrecentlyrisento21%.However,supplyisexpectedtodeclinesignificantlyin2025duetoaccumulateddelaysintheconstructionofnewlogisticsfacilitiesandaslowdownindemandfornewdevelopments.

AsimilartrendhasbeenwitnessedinBusan,wherethevolumeofbuildingpermitsfornewGradeAlogisticspropertieshasbeendecliningsince2022,andonlyalimitednumberoflogisticsfacilitieshavecommenced

constructionduetotheimpactofrisingprojectfinancingrisksand

developmentcosts.Ofatotalof45GradeAlogisticsfacilitiesintheBusan

developmentpipeline,onlysevenprojectshadstartedconstructionasofH12024.

Giventhatconstructionisrequiredtocommencewithinamaximumof

threeyearsaftertheissuanceofabuildingpermit,somepermitsissuedin2021arelikelytobecancelled.

NewGradeAlogisticssupplyisexpectedtobe203,761sq.m.in2025.

Whilemarkinga70%dropfrom2024,itisalevelsimilartoaverageannualsupplyoverthepastthreeyears(2021-2023).The2026development

pipelinestandsatapproximately390,414sq.m.,indicatingthatBusanlogisticssupplywillcontinuetoexpand.

■West

■North

Northwest

■Central

■East

Note:Numbersontopofbarsindicatethenumberofbuildingpermits

Note:Considered'potentialcancellation'when2021buildingpermitsarestillatplanningstage

Source:CBREResearch,Q32024

1Numberexcludingprojectsthatarecompletedandpotentiallycancelled

InteligentInvestmentKorea'sLogistcsHub:BusanGradeALogisticsMarketOverviewandOutlook|Korea

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