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ProLogis Enters South Korea Market

SEOUL-ProLogis manager for operations in the country tells GlobeSt.com it will break ground in Gyeonggi Province for a 400,000-sf cross-docked facility without any signed tenants, but adds that negotiations are underway with users that would fill the building.

By Brian K. Miller | Updated on January 18, 2006

SEOUL-ProLogis will develop its first project in South Korea about 40 miles southeast of here in the Gyeonggi Province, a logistics and manufacturing hub. Construction of the 400,000-sf cross-docked facility will get under way this quarter and be complete in the fourth quarter.Speaking from Seoul, Richard Bae, ProLogis first vice president and country manager tells GlobeSt.com that the building will be started without any signed tenants, but adds that negotiations are underway with users that would fill the building. “We are talking with one multi-national retailer that would like to lease around two-thirds of the facility, and a logistics company interested in one-third of the building,” says Bae.

About 70% of the largest players in the Korean logistics industry are located in Gyeonggi Province, says Bae. Those major players are looking to consolidate operations from the multiple smaller, non-cross-docked facilities that are prevalent in the region, he says.

“Korea is a very small country and there is a very small amount of land for development, so developers like to maximize site coverage,” says Bae. “With cross-dock facilities, you end up with fewer leasable square feet, so very little of that type of product has been developed; but we studied the market and of course (users) prefer these types of facilities because they are more efficient.”

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