Q1 2024
May 2024
High vacancy rate due to large supply and long leasing period
DemandandSupply
Netabsorptionin1Q24was163,000sqm. Demandfrome-commercecorporationsand 3PLscontinuestoexpand,buttenant movementsareslowingdownduetorising rents.
Newsupplyofninefacilitiestotalled631,000 sqmin1Q24,increasingtotalstockby3%q-oqand12%y-o-y.
ThevacancyrateinGreaterTokyostoodat 10.0%for1Q24,increasing190bpsq-o-qand 190bpsy-o-y.ThevacancyrateintheBay arearoseto8.9%,increasing90bpsq-o-q, whileTokyoInlandroseto10.5%,increasing 240bpsq-o-q.
KeyPerformanceIndicators
Physicalindicators
For2019 to2023,take-up,completionsandvacancyrateareyear-end annual.Futuresupply reflectsfiguresfor2024.
Source:JLL
©2024 JonesLangLaSalleIP,Inc.Allrightsreserved. 1 | Tokyo Logistics Market Summary TokyoLogistics MarketSummary Japan Research| 0 1 2 3 4 5 6 7 8 9 10 11 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2019 2020 2021 2022 2023 2024F Percent Thousand sqm Take-up(net) Completions FutureSupply VacancyRate
Vacancyrate Q-o-Q Y-o-Y GreaterTokyo 10.0% +190 bps +190 bps Rents pertsubopermonth Q-o-Q Y-o-Y GreaterTokyo JPY4,641 +0.8% +1.7%
Rents continue to rise due to rising costs
AssetPerformance
GrossrentsinGreaterTokyoaveragedJPY 4,641pertsubopermonthin1Q24,increasing 0.8%q-o-qand2.1%y-o-y.RentsintheBay areadecreased0.5%q-o-q,whileincreased 1.3%q-o-qintheInlandarea.
Forpropertiesthathavebeenvacantfora longtimeorinsubmarketswithmany vacancies,freerentisexpandinginorderto attracttenants.
InvestmentMarket
CapitalvaluesinGreaterTokyocontinuedto increase,reflectingcapratecompressionand stablerentgrowth.
Outlook
Intheleasingmarket,vacancyratesremain highduetolargesupplyandprolongedleasing periods,butthevacancyrateisexpectedto declineinthesecondhalfof2024assupply decreases.Thenewcompletionsareexpected tobefullyoccupiedwithinonetotwoyears aftercompletion.
Althoughthereisdownwardpressureonrents duetoanincreaseinnewcompletionsof inexpensiverentsinareassuchastheKen-O Expressway,thisisexpectedtooutweightby upwardpressureonrentsduetosoaring constructioncosts.Althoughvacancyrates remainhighandvacancyperiodscontinueto lengthen,highrentsfornewcompletionsare expectedtocontinue,andrentsintheoverall marketareexpectedtocontinuetorise.
Intheinvestmentmarket,therearemovement amonginvestorswhohavenotpreviously investedinlogisticsfacilitieshavestarted investing.Capratesmaycompressfurther amidcontinuedinvestorinterest.
Source:JLL
Source:JLL
©2024 JonesLangLaSalleIP,Inc.Allrightsreserved. 2 | Tokyo Logistics Market Summary
GlobalProperty Clock
USpositionsrelatetotheoverallmarket FinancialIndices 80 90 100 110 120 130 140 4Q19 4Q20 4Q21 4Q22 4Q23 4Q24F 4Q19 = 100 RentalValueIndex CapitalValueIndex
jll.com
JonesLangLaSalleK.K.
Tokyo Headquarters KioiTower, Tokyo Garden Terrace Kioicho 1-3Kioi-cho Chiyoda-ku, Tokyo 102-0094 +81343611800
FukuokaOffice
DaihakataBldg. 2-20-1Hakata-ekimae, Hakata-ku,Fukuoka-shi Fukuoka812-0011 +81922336801
OsakaOffice Nippon Life
Yodoyabashi Building 3-5-29KitahamaChuo-ku, Osaka541-0041 +81676628400
NagoyaOffice
JPTowerNagoya 1-1-1Meieki, Nakamura-ku,Nagoya-shi
Aichi450-6321 +81528563357
Contact
TakeshiAkagi HeadofResearch Research -Japan takeshi.akagi@jll.com
Edward Liang Manager Research -Japan edwardl.liang@jll.com
ManabuTaniguchi Senior Director Research-Japan manabu.taniguchi@jll.com
About JLL
For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.8 billion and operations in over 80 countries around the world, our more than 108,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information,visit jll.com
AboutJLLResearch
JLL’sresearchteamdeliversintelligence,analysisandinsightthrough marketleadingreportsandservicesthatilluminatetoday’scommercialreal estatedynamicsandidentifytomorrow’schallengesandopportunities.Our morethan550globalresearchprofessionalstrackandanalyzeeconomicand propertytrendsandforecastfutureconditionsinover60countries, producingunrivalledlocalandglobalperspectives.Ourresearchand expertise,fueledbyreal-timeinformationandinnovativethinkingaroundthe world,createsacompetitiveadvantageforourclientsanddrivessuccessful strategiesandoptimalrealestatedecisions.
