These are the latest additions to Greater Tokyo’s logistics supply

Nearly 1.7m sqm of new space was introduced in H1 2022.

In Greater Tokyo, nearly 1.7 million sq m of new logistics space was introduced to the market in the first half of 2022, indicating that the rate of incoming completions shows no signs of abating. 

According to a Savills report, the largest completion of significant scale was the 195,000 sq m ESR Yokohama-Sachiura Distribution Centre 1 in Yokohama in January. 

Here’s more from Savills:

The facility is overlooking Tokyo bay and is expected to benefit from the extension of the Ken-O Expressway that is scheduled for completion in 2025. Furthermore, ESR plans to complete another large facility, ESR Yokohama-Sachiura Distribution Centre 2, on the adjacent site in January 2023. 

Other recent significant developments include the Mitsui Fudosan Logistics Park (MFLP) Ichikawa Shiohama II in Chiba – completed in March 2022. The facility has four floors and a GFA of over 180,000 sq m and was jointly developed by Mitsui Fudosan and Tsukishima Kikai. 

In addition, the 150,000 sq m multi-tenant facility, Prologis Park Soka, was recently completed in Saitama and has close access to the expressway. Prologis has a number of significant scale multi-tenant and BTS developments in the pipeline, with many to be completed in Greater Tokyo in 2022 and 2023. 

Many of these facilities provide amenities for workers including relaxation lounges, shops, sky decks, and children’s day care facilities, which are expected to help attract more workers and address the labour shortage plaguing the logistics industry. Going forward, 2022 and 2023 are set to see a large increase in supply in Greater Tokyo, with many developments of greater than 100,000 sq m in GFA set for completion.

Greater Osaka saw fewer new developments enter the market in the first half of 2022, and none had a GFA of above 100,000 sq m. The largest addition in 2022 was Orix’s Minoh Logistics Center in March, which has a GFA of just under 65,000 sq m. The facility is located just 2km away from the Shin-Meishin Expressway, providing convenient transport links between Osaka and Kyoto.

Greater Osaka will see many significant scale developments over the next few years, the largest of which being the GLP ALFALINK Amagasaki facility, comprising 370,000 sq m over two buildings to be completed by 2026. Furthermore, Mitsubishi Estate will also be developing a 280,000 sq m facility in Kyoto scheduled for completion by 2026. Despite these large developments in the pipeline, the amount of supply forecast for Greater Osaka over 2022 and 2023 looks manageable overall. 

While vacancy upticks have only been moderate in both Greater Tokyo and Greater Osaka, the impact that construction slowdowns have had must also be considered. Labour shortages and supply chain disruptions have led to delays in the construction of many logistics facilities. This has inadvertently resulted in a slower stream of new supply, and the market had more time to absorb it. However, when the pace of construction picks up, the surge in new supply could unsettle the market, especially when looking at the large amount of new supply forecast for areas like Greater Tokyo.