ProLogis Expands Presence in South Korea with $86M Portfolio Acquisition

Less than a month after announcing two build-to-suit agreements in South Korea, ProLogis Korea Property Fund has acquired approximately 889,000 square feet of industrial warehouse space there for $86.3 million. ProLogis Korea Property Fund is a part of Denver-based Prologis, the world’s largest owner, manager and developer of distribution facilities. The fund purchased a $31 million portfolio in Milyang City totaling 292,330 square feet, a $38.1 million portfolio in Icheon City totaling 327,000 square feet and a $17.2 million portfolio in Cheonan City totaling 269,560 square feet of distribution space. “We continue to see a growth of global manufacturing and trade in South Korea. We are finding a lot of new companies are locating there, so it is a natural fit for ProLogis,” a company spokesperson told CPN. “A lot of our existing global customers are looking at locating distribution facilities there. In Asia, overall, a lot of current distribution space is really obsolete. They have older facilities that are not up to current modern standards, so there is a need for newer high quality distribution space.” The property acquired in Milyang is a two-story warehouse built in 2007. It is 100 percent leased to a local retail company. Milyang City is an emerging distribution hub in the southern part of the country and the facility is in close proximity to major modes of transportation including the Seoul-Busan Expressway, the Busan Seaport and a new logistics railway scheduled for completion at the end of this year. In Icheon, the fund has acquired a sale-leaseback portfolio comprising nine distribution facilities from a major third party logistics provider in Korea. The property (pictured) is located in the Deokpyung market, one of the major logistics hubs in the Gyeonggi and Seoul regions. The Cheonan property consists of two separate two-story warehouses completed in 2007; both are fully leased to a local third party logistics provider. The property is strategically located in Cheonan City, which is known as a top logistics hub for many of the world’s top electronics manufacturers. As of May 1, ProLogis has 14 distribution facilities owned, managed or under development in Korea, totaling 4 million square feet. On April 22, ProLogis announced the inking of two new build-to-suit agreements in South Korea with Logen Express, a national parcel delivery provider, and Wonjin Logistics, a third-party logistics provider. In August 2007, ProLogis Korea Fund completed the acquisition of its first asset in the region, a 108,000-square-foot distribution facility along the Seoul-Busan Expressway, outside Seoul.  Overall, ProLogis currently has 14 distribution facilities owned, managed or under development in Korea, totaling approximately 4 million square feet.