IKEA Korea cancels plans to build Asia's largest logistics center in South Korea

IKEA Korea, the Korean subsidiary of Swedish furniture retailer IKEA, has withdrawn its investment in the Pyeongtaek Bosung district within the Gyeonggi Free Economic Zone and is set to sell about 102,000 units.
The company has begun selling land on a square meter scale. As a result of the suspension of construction, the investment cost of the plot, which was used for the construction and design of the logistics center, amounted to 860.7 million won (approximately 87.5 million yen), which was written down.
The plot was recorded as a loss. IKEA is currently in the process of selling the plot. IKEA Korea signed an investment agreement with Gyeonggi-do in 2020 and is planning to build a new plant in the Boseung district.
The company has been promoting the construction of Asia's largest logistics center on a site the size of 14 soccer fields. However, due to the impact of the COVID-19 virus, consumer spending has been sluggish and consumer preferences have changed,
The company said it was forced to change its investment plan in response to the change in the distribution environment to one centered on e-commerce. This change is for the period up to August 2024, and is not related to the current social situation, such as martial law.
A company official said, "Due to changes in the distribution environment, it became inevitable to reconsider our investment plans. After careful consideration, we have made the difficult decision to withdraw our investment plans in the Bosun area.
"We decided to lower the price," he said.