Korea Logistics 2H/2021

ONLINE RETAIL
Cumulative online sales up to Q3/2021 increased 18% YoY, while total retail sales increased 8% during the same period. Between 2017 and Q3/2021, the rapid shift to online retail channels has lifted the online sales penetration rate from 17% to 28%. Online sales of automobiles and parts and F&B continued to increase in 2021 on the back of rapid growth in 2020. In the first three quarters of 2021, automobiles and parts increased 61% YoY as more people opted for private cars over public transportation amid social distancing. Meanwhile, online fresh food and F&B sales during the same period increased 31% YoY and 30% YoY, respectively, as more people ate at home and adopted overnight delivery services. With the increase in online fresh food sales, demand for not only dry storage but also cold storage has increased, spurring the development of more cold storage facilities.

Cap rates of transacted centers in good locations have fallen to the high-3% to low-4% range. However, the decline is expected to slow on base rate hikes in the future.