Hines Developing Second Cold Chain Warehouse in South Korea

Hines continues to bet on refrigerated storage as it expands its industrial holdings in Asia Pacific, with the US developer this week announcing a new logistics centre in South Korea as its third cold chain project in the region.

The Iljuk Logistic Center south of Seoul will add a combined 1 million square feet (92,903 square metres) of cold and ambient storage space to the Houston-based firm’s growing portfolio in APAC. The four-storey facility will target last-mile logistics providers and feature clearance heights of over 30 feet (9.1 metres), floor loads exceeding 2 tonnes and truck access to all levels of the building, the company said Sunday in a release.

Located where the cities of Anseong and Icheon meet in Gyeonggi province, which surrounds the capital, the property was acquired from engineering firm Wooseok E&C and will host the second logistics project Hines has launched in Greater Seoul. The company broke ground on the Namyang Logistics Center in nearby Hwaseong in the fourth quarter of 2021.

“Anseong is a strategic distribution submarket for us and a new Hines development will give a superior advantage to our future tenants to better serve the region and meet consumer demand,” said Hines director Harry Lee.

Key Growth Market

Construction of Iljuk Logistics Center is expected to begin in the first quarter of 2023, with Hines seeking LEED green building certification for the multi-storey structure.

Hines has ramped up its acquisition and development presence in South Korea in the last 12 months, hiring DWS veteran Lee last January to spearhead a recruitment push.

“South Korea is a key growth market for Hines globally and Iljuk Logistics Center is a great addition to our growing logistics portfolio in Asia Pacific,” said Drew Huffman, managing director at Hines. “Over the last five years, we have seen a significant spike in e-commerce growth and exponential demand growth for new logistics space.”

At the five-storey Namyang Logistics Center in Hwaseong, a Greater Seoul city between Incheon Airport, Incheon Port and Pyeongtaek Port, Hines will offer 460,000 square feet of cold and ambient storage space upon completion of the project in the second quarter of 2023.

Settling Into Sheds

The Korean cold chain projects came about after Hines in 2020 joined forces with Metropolitan Real Estate Equity Management — then owned by Carlyle Group, now part of BentallGreenOak — to acquire a 363,820 square foot cold storage facility and adjacent development site in Guangdong province as the developer’s first logistics project in China.

The Walmart-leased property is in Dongguan’s Shatian district, a logistics hub for the Pearl River Delta urban corridor comprising nine mainland cities plus Hong Kong and Macau. Hines and its partner plan to build an additional multi-storey cold storage complex on the adjacent site.

In addition to the trio of cold chain developments, Hines has acknowledged a fourth APAC logistics development in the past year but has yet to provide details publicly.

Founded in 1957, privately-owned Hines has a presence in 255 cities in 27 countries. The firm oversees investment assets under management totalling $83.6 billion.

Cold Chain Heats Up

Hines’s commitment to its latest South Korean facility comes after CapitaLand Investment and PGIM Real Estate announced in November that they had launched a joint venture seeded with a pair of cold chain facilities purchased from local buyout firm VIG Partners: Foodist Icheon Centre, a 264,856 square foot food distribution hub along the Yeongdong Expressway and National Highway 3, and the 93,818 square foot Foodist Gyeongin Centre near Pyeongtaek Port.

That same month, AEW Capital Management announced its acquisition of a $538.2 million portfolio of Greater Seoul warehouses to mark its first logistics investment in South Korea.

In April of last year, Korea Superfreeze, a cold chain logistics company invested in by Goldman Sachs, said it would spend $2.2 billion developing six cold storage facilities in the country. Koramco REITs and Trusts announced just a month later that a REIT under its management had agreed to pay $318.5 million to purchase a refrigerated warehouse in Incheon occupied by e-commerce platform Coupang.