Harim to Complete 58-Story Yangjae Logistics Complex by 2029... Driving Both Maritime and Land Logistics

Seoul City Conditionally Approves Pilot Urban Advanced Logistics Complex
Yangjae Cargo Terminal Transforms into Smart Logistics Complex
'Korean Cargill' Leap... 13 Trillion KRW Funding Is Key

Harim Group's long-cherished project, the 'Yangjae Logistics Complex,' has passed the Seoul city review, putting it on track seven years after the land purchase. This is a mega project with a budget of about 7 trillion KRW, constructing buildings up to 58 floors high on an area equivalent to 12 soccer fields. If the ongoing acquisition of Korea's largest shipping company, HMM, is successful, Harim will be able to advance as a comprehensive logistics company covering both land and sea logistics.

Yangjae Logistics Complex to have 8 underground floors and 58 aboveground floors... On track seven years after land purchase

Outside the Napoleon Gallery on the 1st floor of the NS Home Shopping annex in Seongnam City. Photo by Younghan Heo younghan@

According to industry sources on the 27th, Seoul City decided on a 'conditional approval' for the 'Urban High-tech Logistics Complex Pilot Project' plan at 225 Yangjae-dong, Gangnam-gu, during the main review of the Logistics Complex Planning Integrated Review Committee held the previous day. The site covers 86,000㎡ around 225 Yangjae-dong, which was formerly used as the Yangjae Cargo Terminal.

Harim purchased the site in 2016 and has been promoting the development of the logistics complex. With Seoul City's recent decision, a floor area ratio of 800% will be applied, allowing the construction of logistics facilities with 8 underground floors and 58 aboveground floors, along with sales and residential facilities. Harim plans to create a smart logistics complex underground by applying advanced technology. On the surface, various residential and commercial-cultural facilities will be built, including 998 apartment units. If measures related to public transportation accessibility, which Seoul City has set as a condition, are prepared, the logistics complex designation approval notice is expected to be issued in January next year.

Afterward, once the building permit from Seocho-gu is obtained, construction can begin. Completion is expected in 2029. Since the Yangjae Logistics Center is adjacent to Yangjae IC, a key point in metropolitan area transportation, Harim plans to use it as a delivery hub within the metropolitan city center in the future. Being close to the Gyeongbu Expressway, the gateway to Seoul, and the Gangnam Circular Urban Expressway will enable delivery to metropolitan consumers within two hours.

Pursuing both land and sea logistics with HMM acquisition... Advancing as the 'Korean Cargill'

Chairman Kim Hong-guk of Harim Group is giving an interview with Asia Economy on the 7th. / Photo by Moon Ho-nam munonam@

Harim has been selected as the final candidate to acquire HMM, the largest domestic shipping company, and is currently negotiating with creditors. HMM, the predecessor of Hyundai Merchant Marine, has a market capitalization of about 12 trillion KRW. Following the acquisition of Pan Ocean, the number one bulk carrier in Korea in 2015, acquiring HMM will enhance Harim's dominance in maritime logistics as a mega national shipping company.

Moreover, once the Yangjae Logistics Center is completed, Harim can advance as a comprehensive logistics company driving both land and sea logistics. This will complete the 'food chain' that extends from grain transportation to feed, livestock, food manufacturing, distribution, and logistics, breaking away from its image as a chicken company. This aligns with Chairman Kim Hong-hak's future vision of dreaming of a 'Korean Cargill.'

However, securing funds amounting to 13 trillion KRW in the mid to long term remains a challenge. Harim's bid price for the HMM acquisition is 6.4 trillion KRW, and the project cost for the Yangjae Logistics Complex is 6.8 trillion KRW. Furthermore, recent increases in raw material prices and labor costs have raised construction costs, potentially increasing the project budget. Harim plans to finance the Yangjae Logistics Center project through sales proceeds and real estate project financing (PF), while acquisition funds for HMM will be arranged through acquisition financing, contributions from JLK Partners, and Pan Ocean's capital increase.

Nevertheless, doubts remain in the market regarding the massive fund-raising. There are suspicions that Harim might sell the Yangjae site or use HMM's reserves as interest for acquisition financing. In response, Harim drew a clear line, stating, "The Yangjae Logistics Complex and HMM acquisition are separate," and added, "HMM's reserves will be prioritized for strengthening the competitiveness of the shipping industry."