Logos Sets Up $1.3B Korean Logistics Development Venture With Bouwinvest

Industrial specialist Logos has launched its first South Korean development venture alongside Dutch fund manager Bouwinvest and two unnamed institutional investors, aiming to deploy up to $1.3 billion to build logistics facilities in Greater Seoul.

Logos and its partners in the new venture aim to establish a state-of-the-art, modern portfolio of logistics facilities to support the expanding Korean logistics and industrial market, the developer said Tuesday in a release.

The latest venture is the 31st logistics real estate vehicle for Sydney-based Logos, adding to its array of development joint ventures across Asia Pacific, including partnerships in China, Malaysia, Indonesia, Vietnam and its home turf of Australia.

“Korea is an important market to complement our regional growth and expansion into Northeast Asia and it plays an important role as we continue to look for ways to support our customers and capital partners’ regional real estate needs,” said Logos managing director and co-CEO Trent Iliffe. “We are also committed to taking the lead on sustainability for the Korean logistics real estate market and help shape new standards for our customers and investors.”

Partnering Again

By teaming up with Bouwinvest, Logos is entering Korea together with an existing partner, having previously joined forces with the Amsterdam-based pension fund manager and Canada’s Ivanhoe Cambridge on an $800 million China logistics venture in 2020.

“We are pleased to expand our logistics footprint in the region as a founding investor for this new venture with Logos and believe long-term fundamentals in South Korea are compelling for development of quality assets,” said Robert Koot, director for Asia Pacific at Bouwinvest. “The strategy also complements our current logistics investments in Australia, Japan, Singapore and China.”

Logos first entered the South Korean market in mid-2020 and has been hard at work sourcing what it calls “an attractive pipeline” of development sites for speculative or build-to-suit warehouse facilities across the country.

“Korea is a market witnessing accelerating e-commerce penetration, strong customer demand for quality logistics facilities and resilient economic fundamentals,” Iliffe said.

The warehouse developer and fund manager has raised $4 billion in capital over the past 12 months despite market disruption caused by COVID-19. Now a unit of ESR after the Hong Kong-listed group’s January acquisition of parent ARA Asset Management, Logos has assets under management in excess of $19.6 billion and a portfolio of property owned and under development spanning 9.1 million square metres (close to 98 million square feet).

Building on a Record Year

South Korea’s logistics transaction volume reached KRW 2.5 trillion in the fourth quarter of 2021 and set a mark of KRW 7.2 trillion (now $5.9 billion) for the full year — both all-time highs, according to JLL’s Korea Logistics Property Digest.

The top deal in last year’s final quarter was ESR Kendall Square REIT’s purchase of six assets for KRW 790 billion (now $650 million) in the wake of the trust’s $400 million follow-on equity offering.

The momentum has continued into this year, with Singapore’s CapitaLand Investment and US-based PGIM Real Estate last month launching a value-add warehouse investment vehicle seeded with a cold storage facility in Gwangju city acquired for KRW 90.2 billion ($74 million).

In late February, SGX-listed Mapletree Logistics Trust announced its purchase of a newly built warehouse in Icheon, southeast of Seoul, for KRW 88.5 billion ($74 million) as the trust’s 20th asset in South Korea.

In January, US builder Hines announced the development of Iljuk Logistics Center, a cold chain facility close to where the cities of Anseong and Icheon meet in Gyeonggi province, as the Houston-based firm’s second logistics project in Greater Seoul after breaking ground on the Namyang Logistics Center in nearby Hwaseong in the fourth quarter of 2021.