Japan Logistics MarketView Q3 2023

October 31, 2023 10 Minute Read

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Vacancy rates rise in all four major metropolitan areas;
New developments gather pace in regional cities


  • The vacancy rate for Large Multi-Tenant (LMT) logistics facilities in Greater Tokyo rose by 0.7 pp. from 8.2% to 8.9% in Q3 2023. New supply for the quarter consisted of 234,000 tsubo across 10 properties, two of which came on stream at maximum occupancy, while the remainder had significant vacancies. Demand remained robust, with this quarter’s net absorption of 171,000 tsubo outstripping last year’s quarterly average. The completion of one new facility commanding relatively high rents ensured that effective rents for Q3 2023 rose by 0.2% q-o-q to JPY 4,520 per tsubo.
  • The LMT vacancy rate in Greater Osaka reached 4.5%, up 1.3 pp. from the previous quarter. Although the three new facilities completed during the quarter all commenced operations with vacant units still available, pre-leasing of centrally located properties generally continued to proceed smoothly. Effective rents slipped by 0.2% q-o-q to JPY 4,110 per tsubo, primarily due to the addition of new facilities in low-rent areas. Other areas with fewer vacancies registered rental increases over the quarter.
  • The LMT vacancy rate in Greater Nagoya rose by 3.1 pp. q-o-q to 8.3%. Four new properties were completed this quarter, including one of the largest nationwide, pushing up quarterly net absorption to a record high 104,000 tsubo. Effective rents rose by 0.8% q-o-q to JPY 3,620 per tsubo.
  • The LMT vacancy rate in Greater Fukuoka spiked by 5.0 pp. q-o-q to 5.9% on the back of the completion of one of Greater Fukuoka’s largest facilities, which came on stream with some vacancies. Effective rents in the area rose by 0.9% q-o-q to JPY 3,440 per tsubo as rents in and around Fukuoka City and in the Tosu area continue to rise steadily.