[NewsSpace=Jack Moon] Concerns about an oversupply of logistics centers in the metropolitan area are easing. This is due to a significant decrease in new construction and a gradual filling of existing vacant spaces. However, rental rates have remained stagnant for the second consecutive year, as many logistics centers still struggle to secure tenants.

According to RSQUARE Analytics (RA), a commercial real estate services company, the "2024 Second Half Metropolitan Area Logistics Center Market Report," released on the 12th, highlighted these findings. The report states that the new supply of logistics centers in the metropolitan area during the second half of last year was 580,000py, accounting for about 6% of the total cumulative supply.

This decline is attributed to increased market uncertainty due to supply-demand imbalances in logistics centers and difficulties in securing project financing (PF). RSQUARE forecasts that new supply will decline even more sharply after 2025.

Vacant spaces are also gradually decreasing. The average vacancy rate for ambient-temperature logistics centers in the second half of 2024 was 16.0%, down 0.9%p from the previous period. For cold storage logistics centers, the vacancy rate decreased by 2.7%p to 38.5%.

However, many logistics centers still face difficulties in finding tenants. As a result, rental rates have remained stagnant for two years. The rental rate/py for ambient-temperature logistics centers in the metropolitan area is 32,928 KRW, similar to the level in the second half of 2022 (32,898 KRW).