Realignment of development projects could push up Greater Tokyo logistics rents

Construction periods for Large Multi-Tenant (LMT) logistics facilities in Greater Tokyo typically vary by project scale, but generally fall into the range of 1.5 to 2.5 years. As such, projected new supply volume tends to increase up to two years from the scheduled year of completion as new plans are put in place. After that two-year mark, new supply volume is essentially fixed as most facilities are completed in accordance with initial projections. New LMT logistics supply for the Greater Tokyo area in 2023 and 2024 followed this pattern.

However, new supply slated for 2025 shows a very different trend. As new plans were announced between 2022 and 2023, projected new supply for 2025 reached 595,000 tsubo by Q4 2023. However, a year later in Q4 2024, projected new supply for 2025 had fallen to just 467,000 tsubo, representing a drop of around 130,000 tsubo, or 22%, over that period.