Net absorption in the West hit its highest level since Q1 2025

• Net absorption in the SCA market reached approximately 49,600 pyeong in Q2 2026. While the Central and South-east submarkets registered negative net absorption, the North, South and West posted positive figures.
• The West led all submarkets with net absorption of approximately 36,900 pyeong, driven by new occupiers from the 3PL, wholesale & retail and e-commerce sectors. The South, North, South-east and Central followed respectively.

Supply continued its downward trajectory in the quarter

• New supply totalling 68,800 pyeong was delivered to the SCA market in Q2 2026, with Kendall Square Dangmok Logistics Park in the South and Bucheon Samjeong-dong Logistics Center in the West contributing to the new supply.
• Vacancy rate held steady at 15.5% compared to the previous quarter. Vacancy has remained range-bound since Q3 2025, fluctuating within a narrow band. Modest increases were observed in the Central, South and South-east, while the West and North posted marginal declines.

Logistics market cap rate held steady at 5.2%

• Net effective rents in the SCA reached approximately KRW 32,900, up 0.7% q-o-q and 2.8% y-o-y. All submarkets recorded rental growth with the exception of the North, where several centres with elevated vacancy reduced asking rents, resulting in a decline.
• Transaction volume in the logistics sector reached approximately KRW 889.9 billion in the quarter. The largest deal was the Seongeun-ri Logistics Center in the South, which transacted at KRW 215 billion, with IGIS Asset Management selling to ADF Asset Management.

Outlook: Cap rates are forecast to widen by 10 bps by year-end

• With the Bank of Korea raising its base rate to 2.75% in July, deals progressing from 2H26 onward may face elevated borrowing costs, which could dampen acquisition activity.
• Supply in 2026 is forecast at about 47% of 2025 levels and about 15% of 2024 levels. However, sustained demand from 3PL, e-commerce and manufacturing occupiers is expected to drive net absorption above new completions, supporting market fundamentals.