- February 1, 2019: Vol. 11, Number 2

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Growing trend: The upside to developing core logistics assets in South Korea

by Kyung Paik and Kangmin Ryu

E-commerce. Big box. Last-mile delivery. These phrases have been widely heard in the real estate market over the past few years as attention continuously focused on the logistics asset class globally, backed by the rapid development of the e-commerce industry. The change in consumption patterns and the growth of e-commerce have been a global phenomenon and, along with other countries such as China and the United Kingdom, South Korea has been at the forefront of this e-commerce evolution. While retail sales volume in South Korea increased from approximately US$29.6 billion in 2015 to an estimated US$33.6 billion in 2018, the e-commerce penetration rate — percentage of sales made online compared with total retail sales — grew from 16 percent in 2015 to an estimated 23 percent in 2018, according to Statistics Korea. This 23 percent is meaningfully higher than the estimated global average of 12 percent in 2018, reported by Statista. It is forecast this rate could rise above 30 perce

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