이 기사는 2020년 02월 03일 08:00 thebell 에 표출된 기사입니다.

Investment demand for refrigerated logistics facilities is on the rise in South Korea where fresh food e-commerce market is growing rapidly, making the asset class emerge as an area of focus.

The rapid growth of e-commerce has accelerated the development of logistics properties in the Seoul metropolitan area. A growing investment demand has pushed up transaction volume for logistics assets by an average of 30 percent year-on-year for the past five years, according to a recent report from real estate services firm CBRE. The report estimated that logistics transaction volume reached 1.3 trillion won in 2018 and a similar number in 2019.

In particular, an increase in demand for delivery and storage of temperature-sensitive products, such as fresh food and pharmaceuticals, has made cold storage facilities more attractive to investors. The asset type currently accounts for a small portion of total logistics transaction volume in the country, though the growth potential is high.

According to Real Capital Analytics (RCA), the investment turnover of cold storage facilities comprised only five percent of total industrial transaction volume in Asia Pacific between 2014 and 2018. In South Korea, where cold storage investment activities began to emerge in 2013, the asset class accounts for about nine percent of total logistics volume over the last five year.

“More recently, new supply of large scale logistics complexes and the growth of the fresh food delivery market has led to an increase in transactions for mixed assets that combine dry and cold facilities,” said CBRE in the report. “Rapidly expanding fresh food delivery market and intense competition for delivery quality among retailers are expected to generate huge demand for cold storage in the coming years. This phenomenon is expected to generate more cold supplies and thus more cold asset transactions.”

Competition for cold storage warehouses serving as logistics hubs in the country’s metropolitan area is getting more intense due to changes in the retail industry and growth in the fresh food delivery market. Those with a geographical advantage and modern specs have already fallen short of demand.

But there is polarization in the market. Many cold storage facilities have been put up for sale on the back of a recent increase in investment demand for the asset class, but old ones or those located in less accessible places have hardly drawn interest from investors.

“Operating expenses for cold storage are greater than those for dry warehouses due to their higher power requirements. Refrigeration accounts for more than 70 percent of overall electricity consumption in cold storage facilities,” CBRE pointed out in the report. “Thus, investors willing to invest in cold storage assets should seek for ways to minimize operating expenses. They should prevent cracks that can change internal temperature and locate cold storage in underground floors where maintaining certain temperature is relatively easier.”

Amid an increase in investment demand for logistics centers, the dynamics of types of demand have also changed from industry players to institutional investors, like asset managers, who seek to buy property assets only, not a whole entity. They prefer this, as they want to avoid any contingent liabilities or responsibility for employees of the acquired entities.

“We have recently seen many cases where institutional investors are interested in property assets only, not a whole entity, when they seek to buy cold storage warehouses. This also tends to be the case when they sell such properties,” said an investor.

(By reporter Han Hee-yeon)