Tokyo
• Vacancyratesriseagaintoover10%duetoalargesupply
• Demandexpansioncontinues,butlocationdifferencesintensify
• Rentincreasescontinue,reflectingrisingcosts
InQ12025,net absorptionreached 588,000sqmduetosteady demand driven bye-commerce salesgrowth andalargevolume of newsupply. Astransportcostsrise,demand isstrong forproperties closetothecity centre andwithshorttransportation distances, while properties infringeareaswithhighertransportcostsarestruggling. Thedifference intenant demand basedonlocation isintensifying.
Therewasanewsupplyof855,000sqmacrosssevenbuildings, increasingthetotalstockareaby10.1%y-o-y. Theoverallvacancy rateinGreaterTokyo reached 10.3%,up78bpsq-o-q and27bpsy-oy.Whilewell-located properties arefullyoccupied uponcompletion, someproperties inchallenging locationshavevacancieslastingover one year.
GrossrentinGreaterTokyo wasJPY4,677per tsubopermonth, down 0.2%q-o-q butup0.9%y-o-y. Thisreflectsrentdecreasesinexisting properties withprolonged vacancy periodsaftercompletion. However, thetrend ofhighrentsinnewly constructed properties
pushinguprentsinsurrounding properties continues, maintaining theoverallupwardtrend inrents.ThecapitalvalueinGreaterTokyo decreased by0.2%q-o-q. Despiterisinginterestrates,investment yieldsremain stableduetostronginvestor demand.
Outlook
Rent increasesareexpected tocontinue, driven byexpanding demand frome-commerce growthandrisingconstruction costs. Investorsarelikelytoincreaserentson theirproperties more aggressivelyduetorisinginterestratesandproperty management costs.However, someareasmayseepotential rentdecreasesdueto anincreaseinvacantproperties.
Regarding theUStariffincreases,whiletheyareexpected tohave long-term effects througheconomic fluctuations,theshort-term impactondemand isconsidered limited, asmostlogisticsfacility tenantshandledomestic cargo withinJapan.
Fundamentals
Note:TokyologisticsreferstotheGreaterTokyoprimelogisticsmarket.Dataisonan NLAbasis.
Historicalsupplyanddemandtrends
s.m.(thousands)
TokyoLogistics MarketDynamics Q12025
JonesLangLaSalleK.K.
Tokyo Headquarters
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Kansai
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Fukuoka
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Nagoya
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+81528563357
Formoreinformation,pleasecontact
ManabuTaniguchi
Senior Director
Research-Japan
manabu.taniguchi@jll.com
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