- Despite an influx of supply, demand was stronger than expected in Greater Tokyo, resulting in a vacancy rate of 3.3%.
- Greater Osaka vacancy fell to 7.1% as the market continues to digest supply added in 2017.
- Asking rents have been stable in Greater Tokyo, while rising top rents are pulling the average up in Greater Osaka.
- Demand for new facilities from e-commerce and 3PL companies supports sound pre-leasing activity.
- Investor interest in this sector remains strong, highlighted by the recent announcements of new funds targeting logistics facilities.
- Major logistics companies have improved financial performance, which appears to have resulted in strong demand for logistics facilities.
- Given the sector's strong investment demand and moderate yield spread, cap rates might have room for further compression.
Logistics demand stronger than expected
(1).jpg "Graph 1")
GRAPH 1 | Supply, Take-up And Vacancy In Greater Tokyo, 2010 to 2018
Notwithstanding a wave of new supply, the logistics market has seen stronger-than-expected demand in 2018 marked by sound leasing activity. Supported by positive prospects, interest in this sector remains strong among investors.
Savills Research & Consultancy