Located in southeastern South Korea, The Greater Busan area is the nation’s second-largest urban centre. Its strategic position links the Pacific Ocean and Northeast Asia. The Port of Busan, which is the world’s second-largest transshipment port, handles 24.3 million twenty-foot equivalent units (TEUs) annually, according to the Busan Port Authority. Greater Busan’s logistics market, supported by its large population and strategic location, has emerged as Korea’s second-largest logistics cluster after the Seoul Capital Area (SCA), attracting significant investor interest.

Figure 1: Overall Greater Busan stock

Source: JLL Korea, Ministry of Land, Infrastructure and Transport
Unit: sqm

Figure 2: New Grade A supply in Greater Busan by period

Source: JLL Korea, Ministry of Land, Infrastructure and Transport
Unit: sqm

Strong demand is driving the Greater Busan logistics market to expand alongside the SCA logistics market. By the end of 2024, the Greater Busan stock was approximately seven million sqm, representing a 16% increase from the previous year. Of which, Gyeongsangnam-do accounts for 55%, Busan for 38%, and Ulsan for about 7%. Currently, the Greater Busan stock is equivalent to about 20% of the overall SCA stock.

As of 2024, Greater Busan hosts 45 large logistics centres, each over 33,000 sqm (JLL’s definition of Grade A: GFA of over 33,000 sqm). About 30% of these centres are owner-occupied, while 70% are leasable. Specifically, centres built in the 2000s account for about 610,000 sqm, those from the 2010s for 1.25 million sqm, and those from the 2020s for around 1.71 million sqm. Remarkably, completions from 2000 onwards are equivalent to about 92% of the GFA built between 2000 to 2019, indicating a significant surge in new supply in recent years.

Figure 3: No of permit and groundbreaking in Greater Busan Grade A market

Source: JLL Korea, Ministry of Land, Infrastructure and Transport

However, the supply delays currently prevalent in the SCA are also affecting Greater Busan, making it unlikely that the supply surge will continue. Rising construction costs, developer bankruptcies, and project financing risks have led to a decrease in new project commencements. New permits for Grade A logistics centres in Busan, including owner-occupied centres, dropped from 18 in 2022 to just four in 2024. Groundbreakings fell from 11 projects in 2022 to just one in 2023. This decrease in supply is expected to focus leasing demand on newly completed centres.

Busan’s logistics market demand profile differs notably from the SCA. While the SCA’s tenant base is primarily composed of third-party logistics (3PL), followed by e-commerce and wholesale/retail, Busan shows significant demand for F&B storage, particularly seafood near coastal areas. This is driven by the need for rapid distribution of fresh produce and marine products both within Greater Busan and nationwide. The market also sees significant demand from large retailers, 3PL providers, manufacturers, and wholesale/retail businesses. E-commerce giants such as Coupang and Market Kurly in the SCA logistics market have also established a strong presence in Busan, with Coupang operating eight fulfilment centres in the Greater Busan area as of 2024. Busan’s robust tenant demand is underpinned by its position as the second-largest population centre after Seoul, coupled with its excellent transportation infrastructure, and pivotal role as a Northeast Asian logistics hub.

The unique supply and demand dynamics of Busan’s logistics market have attracted significant interest from institutional investors. Due to the relative scarcity of investable Grade A logistics centres in Busan compared to the SCA, there is expected to be sustained interest in stable logistics facilities that offer prime locations and high-quality tenants.

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