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- The industrial vacancy rate in the Greater Tokyo area declined to 3.8% in Q4 2014, with three new facilities completed, all at full occupancy. Demand is being led by retailers expanding capacity for e-commerce. Facilities due for completion in the next six months are estimated to be 60% pre-let.
- In the Greater Osaka Region, one new facility was completed this quarter. The vacancy rate was flat q-o-q, holding steady at 0.4%. The supply/demand balance remains tight and rents are showing a clear upward trend.
In the Greater Tokyo Area, three new large multi-tenant facilities were completed during the quarter, all of which were fully let. Vacant space in other properties completed during 2014 was also gradually taken up, a trend which pushed down vacancies from 4.9% in Q3 2014 to 3.8% in Q4 2014. Total net absorption in 2014 stood at over 190,000 tsubo, second only to 2013's record figure of circa 220,000 tsubo. Demand was led by major retailers and online retailers, particularly by those in the apparel industry, which are aiming to set up or expand online sales.
In districts where the market is particularly tight, achieved rents have risen by as much as 10% to 12% compared to the period immediately following the onset of the Global Financial Crisis in September 2008. At facilities scheduled for completion, the impact of higher construction and materials costs has resulted in higher asking rents. At the same time however, tenants are also prepared to accept some increases in rents for competitive facilities, as they place more focus on location and usability when making leasing decisions.
Demand was also buoyant in the Greater Osaka Area in Q4 2014. One new large multi-tenant facility was completed during the quarter, coming to market at almost full occupancy. New supply and net absorption stood at around 100,000 tsubo for 2014, the highest figure recorded since CBRE surveys began for the area in 2007. There is now a clear upward trend in rents, as supply remains tight with vacancies standing at just 0.4%.
"In both the Greater Tokyo and Greater Osaka areas, facilities slated for completion this year have been very successful in finding tenants,” said Maro Kobayashi, executive director of CBRE's Industrial Services team. “There is still plenty of opportunity for demand for logistics facilities to increase, as smaller companies in the food, apparel, and other industries are following major corporations into e-commerce.”
For further details of market trends and forecasts as well as detailed market data by area, please refer to the Q4 2014 Japan Industrial and Logistics MarketView, scheduled for release on January 30. The MarketView will be published on the CBRE Japan website at http://www.cbre.co.jp/EN/research/Pages/MarketViews.aspx.
Chart 1: Large Multi-Tenant Properties in Greater Tokyo Area
Chart 2: Large Multi-Tenant Properties in Greater Osaka Region
Vacancy rate computation standards
- Subject regions:
- Greater Tokyo / Metropolitan Tokyo, Chiba prefecture, Saitama prefecture, Kanagawa prefecture, Greater Osaka / Osaka prefecture, Hyogo prefecture
- Subject properties:
- Properties with floor area of 10,000 tsubo or more
- In principle, properties planned/designed under the presumption of multi-tenant use at time of development
- Greater Tokyo: 76 buildings -Greater Osaka: 15 buildings
- Vacancy Rate computed at end of months: (1) March, (2) June, (3) September, (4) December Vacancies are those that are ready to receive tenants at time of survey (newly built properties are those on which construction is complete).
Download a PDF version of the press release here.
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