"Japan's logistics sector has been resilient despite challenges in recent years, and is poised to reap the benefits in the midterm. As such, logistics assets have kept popular among investors, with large transaction volumes seen in 2024. While new supply will be elevated this year, the noticeable decline in new supply beyond 2025 will create more breathing room and support leasing activities among existing properties with vacant space. Additionally, many logistics operators have continued to enhance operational efficiency in response to chronic labour shortages, which should further strengthen the sector’s resilience and longer-term outlook."

"Overall demand in the logistics sector remains sound, but high levels of new supply in recent years have kept vacancies on a rising trend. In addition, many challenges, including global uncertainties, labour shortages, interest rates, and construction costs, have kept many players on their toes. That said, the logistics market is evolving, with strong fundamentals in a longer-term timeframe. In the interim, prime logistics facilities with modern amenities in accessible areas should continue to perform well, although older facilities in less convenient areas are likely to face challenges."

"The logistics sector continues to perform well overall, but the large new supply over the past year has loosened the market, with vacancy rates rising as some new properties struggle to fill available floors. The industry will face a number of challenges moving forward, including the sustained influx of new supply and labour regulations that may dampen operations. While prime logistics facilities remain fully occupied and even display rental growth, older facilities with outdated specifications in less desirable locations are expected to keep struggling."