Real estate prices of logistics centers in the greater Seoul area in the first half of this year have dropped over 20 percent from the previous six month period, amid an oversupply of such facilities and a sluggish economy, according to a local report released on Thursday.

According to real estate market research firm Rsquare's report, the average price of a plot of land measuring 3.3 square meters used by logistics centers in Seoul and the surrounding area came to 5.96 million won, down 23 percent from the previous half.

The report said the price climbed to 7.94 million won in the second half of 2021, but has been on a downward trend since then.

The average vacancy rate for cold storage facilities in the greater Seoul area in the January-June period jumped to 10 percent, threefold the vacancy rate for regular logistics facilities.

Cold storage facilities in the northwestern part of Gyeonggi Province, which include Goyang, Paju, Gimpo and Bucheon, suffered the highest vacancy rate of 45.3 percent, up 10.6 percent from the previous half.

The vacancy rate for cold storage warehouses in the western part of Gyeonggi Province, including Ansan, Siheung and Gwangmyeong, also reached 24.5 percent.

“The downward trend in real estate prices for warehouses and the high vacancy rate came as the country’s e-commerce market started to grow at a slower pace after the the COVID-19 pandemic,” an industry source also noted.

Despite the growing vacancy rate, real estate transactions for warehouses did not drop immediately.

In the first half of this year, the combined value of real estate transactions for logistics facilities, spanning across plots of land measuring 3.2 square meters in total, came to 3.2 trillion won, going up 30 percent from the previous half and also posting an all-time high since 2010.

Rsquare said that the increase in the value of real estate transactions, however, does not mean that companies will keep expanding their storage facilities this year.

Rsquare noted that around 66 percent of the transactions made this year were ones signed prior to the first half, and became part of the tally as companies sealed the deals upon completion of the facilities' construction.

The market research firm added that real estate transactions will continue to increase in the second half of this year, providing storage facilities on a total available land area of around 500,000 square meters.

“This could cause an imbalance between supply and demand in the future,” an official from Rsquare said.