Mapping Greater Tokyo’s Mid-Sized Multi-Tenant Logistics Facilities Market

Large multi-tenant (LMT) logistics facilities are typically designed with truck berths on every floor, enabling space to be subdivided into units of varying sizes to accommodate a wide range of tenant requirements. 

By contrast, demand for mid-sized multi-tenant (MMT) logistics facilities is driven primarily by single-tenant occupancy. As tenants in MMT facilities tend to occupy properties for extended periods after commencing their lease, these assets are generally well positioned to provide a stable and predictable income stream.

Although the MMT vacancy rate has generally followed a trajectory similar to that of LMT facilities, the MMT vacancy rate tends to rise more sharply during periods when the LMT vacancy rate increases.

As in the LMT market, the MMT supply-demand balance is expected to remain tight in the Tokyo Bay and Gaikando areas, both of which benefit from close proximity to central Tokyo. In the Route 16 area, vacant space is expected to be absorbed gradually, although leasing momentum may remain soft in certain submarkets. Vacancy absorption in the Ken-O-do area is also expected to remain gradual due to the relatively ample availability of space.