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| An Amazon logistics center in Dortmund, Germany / Reuters-Yonhap |
By Park Jae-hyuk
Amazon's logistics centers worldwide are becoming the most-sought-after target for Korean institutional investors which have recently resumed their foreign alternative investments, according to industry officials, Monday.
Last month, KB Securities paid around 66.8 million pounds ($86 million) to acquire Amazon's 23-acre warehouse in Dunfermline, 23 kilometers northwest of Edinburgh. It was the largest single-asset industrial investment deal in Scotland.
According to U.K. magazine Logistics Manager, the fully automated facility was let to the e-commerce giant on a 20-year lease in 2011 with rent reviews every five years to increase in line with the consumer price index.
Industry officials expect the investment has guaranteed KB Securities a 7 percent to 8 percent annual return.
Following the continued spread of the coronavirus, a growing number of securities firms and asset management companies here have begun betting on facilities leased to the world's largest e-commerce company.
This has been attributed to the faster-than-expected growth of the e-commerce industry in major countries during the pandemic.
Amazon's brand equity is also mentioned as a factor that makes Korean investors anticipate solid profits and easier reselling in the future.
In this regard, Hana Financial Investment joined hands with NH Investment & Securities in June to buy an Amazon logistics center in Germany for 70 billion won ($60 million).
NH made another investment in an Amazon facility in Japan. The company spent 150 billion won in January on acquiring a 50 percent stake in the Odawara Fulfillment Center.
It seeks to list the facility-based real estate investment trust (REIT) on the Korean market by the end of the year.
In the United States, investments in Amazon's facilities by Korean institutions are much brisker.
Mirae Asset Global Investments was selected recently by Scannell Properties as the preferred bidder for the acquisition of three Amazon logistics centers in Indiana, Ohio and North Carolina, according to industry sources.
The Korean firm reportedly offered 200 billion won to take over the facilities within the year.
Hana also created a 200 billion won fund with IGIS Asset Management to buy an Amazon logistics center which is under construction in Delaware.
When the construction is finished next July, Amazon will rent the space for 20 years.
Amazon posted a record-high $88.9 billion in sales for the second quarter. Its net profit was $5.2 billion during the period, double the previous year.
The company said it would hire 100,000 more workers in the U.S. and Canada this year to keep pace with e-commerce demand that has jumped during the pandemic.
