- In Greater Tokyo, vacancy has increased again, rising 1.4 percentage points (ppts) year-on-year (YoY) to 9.0%. That said, the rate of increase has tapered off in the past year, and may stabilise further in 2025.
- In Greater Osaka, the supply-demand balance remained relatively tight, although vacancy increased slightly by 0.3ppts YoY to 3.6%. However, elevated supply in 2025 may cause some temporal disruption in the market.
- Rents in Greater Tokyo declined by 2.5% half-year-on-half-year (HoH), although strengthening by 1.7% YoY to JPY4,700 per tsubo.
- Rents in Greater Osaka increased by 2.9% HoH and 1.4% YoY to JPY4,300 per tsubo.
- Investment levels in the industrial sector in 2024 exceeded those of 2023, with a handful of big-ticket transactions observed in the second half of the year. Logistics assets remained popular, comprising nearly 30% of total transactions in Japan in 2024, with overseas investors particularly active.
- Nationwide new supply in 2025 will be similarly elevated as the previous year, with Greater Osaka seeing a record-high influx, while Greater Tokyo sees a noticeable drop. However, over the coming years, new supply nationwide is set to decline due to rising construction and land costs, as well as labour shortages.
- Overall, the logistics sector is nearing a turning point, as consistent firm demand supported by strong fundamentals in the sector, coupled with declining new supply in the coming years should create a more balanced supply-demand equilibrium.
Logistics sector steadily moving towards more stabilised situation
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.
Savills Research & Consultancy