CBRE releases Q1 2019 Japan Logistics MarketView

Robust Demand Drives Greater Tokyo Net Absorption to Record High; Greater Osaka Vacancy Rate Falls Below 10%

CBRE today released its Japan Logistics MarketView for Q1 2019.

CBRE VACANCY RATE FORECASTS (Q1 2019 – Q3 2019)

• The vacancy rate for LMT properties in the Greater Tokyo Area is expected to rise by 0.1 point q-o-q to 5.0% over the next two quarters.
• The vacancy rate for LMT properties in the Greater Osaka Area is expected to fall by 1.8 points q-o-q to 7.3% over the next two quarters.
• The vacancy rate for LMT properties in the Greater Nagoya Area is expected to rise by 6.3 points q-o-q to 14.4% over the next two quarters.

Highlights:

• The vacancy rate for LMT properties in the Greater Tokyo Area stood at 4.9% in Q1 2019, a slight increase on the 4.8% recorded in Q4 2018. Market activity was brisk this quarter, with new supply of 203,000 tsubo the highest ever level on a quarterly basis, and net absorption surging to a record high 189,000 tsubo.
• The vacancy rate in the Ken-O-do Area has now fallen by 9.0 points over the past two quarters to 12.2%, a significant decline from the recent high of 21.2% in Q3 2018.
• Effective rents rose again in all four areas of Greater Tokyo, recording an overall increase of 0.2% q-o-q to JPY 4,160 per tsubo. Rents are expected to rise by a further 1.0% over the next two quarters as properties in prime locations secure tenants at a faster pace.
• The vacancy rate in the Greater Osaka Area LMT market stood at 9.1% in Q1 2019, 3.9 points lower than the 13.0% reported in Q4 2018. This quarter marked the first time that the vacancy rate in the Greater Osaka Area has fallen below 10% since the 6.9% level recorded in Q3 2016. Effective rents, which returned to positive growth in the previous quarter, increased by a further 1.1% to JPY 3,570 per tsubo.
• The decline in the vacancy rate this quarter has significantly improved the outlook for the Greater Osaka Area market. Leasing options are narrowing for companies seeking large units, and properties under construction are securing tenants at a faster pace.
• The vacancy rate in the Greater Nagoya Area LMT market increased by 3.5 points q-o-q to 8.1% in Q1 2019. This was partly due to one new building – the first addition to the market since Q1 2018 – having unlet space remaining upon completion, although enquiries for this property have been brisk.
• Effective rents in the Greater Nagoya Area LMT market rose by 0.6% to JPY 3,570 per tsubo, despite the jump in the vacancy rate. Rents increased following the completion of a new property in the central area, while growth is also being supported by the shortage of properties in areas suited to logistics.

For further details, refer to the Q1 2019 Japan Logistics MarketView published by CBRE.
https://www.cbre.co.jp/en/research-reports/industrial-reports

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