Tokyo Vacancy Rate for LMT Properties Falls to 6.5%; Disparity between Areas Increases

CBRE today released its Q1 2017 logistics market data in Japan’s three major areas: Greater Tokyo, Osaka, and Nagoya.


  • The Greater Tokyo Area large multi-tenant property (LMT) vacancy rate fell to 6.5% in Q1 2017, a decline of 0.3 percentage points q-o-q. The Greater Tokyo Area’s net absorption of 27,000 tsubo was the lowest recorded since Q3 2015.
  • The disparity between areas has increased further this quarter, with the vacancy rate falling in all three inner areas (the Tokyo Bay, Gaikando, and Route 16 areas), but rising again to 19.8% in the Ken-O-do Area.
  • The Greater Osaka Area vacancy rate rose to 17.4% as several new properties were completed with unlet space remaining. However, the period saw solid demand for properties nearing completion in inland areas, while demands for large properties also emerged in waterfront areas.
  • The Greater Nagoya Area LMT market achieved two new records. First, it saw 52,000 tsubo of new supply. Second, net absorption hit 39,000 tsubo. The vacancy rate in the area rose to 8.5%.

Greater Tokyo Area

The vacancy rate for LMT properties in the Greater Tokyo Area declined by 0.3 points q-o-q to 6.5% in Q1 2017. However, the disparity in the vacancy rate increased between different areas, with the rate falling in all three inner areas (the Tokyo Bay, Gaikando, and Route 16 areas) but rising again in the Ken-O-do Area to 19.8%. Net absorption this quarter was 27,000 tsubo, the lowest quarterly total since Q3 2015. Although the vacancy rate for buildings more than a year old remained low, it has gradually risen since its record low at 1.2% in Q4 2015.

"All properties due to be completed in 2017 in the three inner areas have made progress in finding tenants," commented Wataru Sato, senior director of CBRE's Tokyo Industrial Services group. "In addition to having good transport links to central Tokyo, these areas are also attractive to tenants because they all surrounded by densely populated cities, making it easier to source employees. The Ken-O-do Area has also begun to see inquiries for large units, mainly in high-spec properties equipped with ramp ways. The vacancy rate is consequently expected to fall again in Q2 2017."

Greater Osaka Area

The vacancy rate in the Greater Osaka Area LMT market surged to 17.4% in Q1 2017, mainly due to unlet space remaining in new properties completed in inland areas. Net absorption was also low but the volume of demand is likely to recover in Q2 2017. This is because properties in inland areas due to be completed in the next few quarters have been successful in finding tenants. Also, in waterfront areas, inquiries have emerged from large tenants due to the rapid decline in effective rents.

"The range of locations and specifications have become more diverse and the range of rents has widened," commented Kenji Kitamura, senior director of CBRE's Kansai Industrial Services group. "A wider range of space options may have encouraged a greater variety of tenants to consider LMT properties."

Greater Nagoya Area

The Greater Nagoya Area LMT market saw the completion of record new quarterly supply of 52,000 tsubo, with tenants already having been secured around 80% of the space. While the vacancy rate rose by 5.9 points q-o-q to 8.5%, it is also worth noting that net absorption in the Greater Nagoya Area reached a record high of 39,000 tsubo. Effective rents also soared by 2.3% q-o-q to JPY 3,500 per tsubo.

"Three facilities were fully let before completion this quarter thanks to single tenants each renting out the entire property. Some tenants were also seen to have expanded their space in their existing premises," commented Haruo Ishikawa, senior director of CBRE's Nagoya Industrial Services group. "Clearly, demand for LMT is continuing to expand in the Greater Nagoya Area."

For further details of market trends and forecasts as well as detailed market data by area, please refer to the Q1 2017 Japan Logistics MarketView, scheduled for release on April 28. The MarketView will be published on the CBRE Japan website at





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Press Release
Japan Logistics MarketView Q1 2017

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