Tokyo industrial sector’s net absorption hits over 2 million sqm in 2022 | Real Estate Asia
, Japan

Tokyo industrial sector’s net absorption hits over 2 million sqm in 2022

It was very close to 2019 absorption levels.

According to a JLL report, net absorption in Tokyo’s logistics sector totalled a strong 694,000 sqm in 4Q22, with strong, sustained demand from 3PLs and online retailers. For full-year 2022, the figure was more than 2,048,000 sqm, almost in line with the 2,104,000 sqm recorded in 2019.

Here’s more from JLL:

New supply totalled 765,000 sqm (NLA) in 4Q22, increasing total stock by 4% q-o-q. Eight facilities, including DPL Urayasu 3 (GFA 31,000 sqm) in the Bay area and GLP ALFALINK Sagamihara 4 (GFA 152,000 sqm) in the Inland area, entered the market. For full-year 2022, new supply totalled 2,710,000 sqm (NLA), increasing stock by 18% y-o-y; this exceeded the historical high of 2,232,000 sqm in 2021.

The vacancy rate in Greater Tokyo stood at 5.2% for 4Q22, increasing 20 bps q-o-q and 340 bps y-o-y. The vacancy rate in the Bay area fell to 2.8%, decreasing 180 bps q-o-q, while Tokyo Inland rose to 6.2%, increasing 100 bps q-o-q, driven by new completions entering the market.

Average rents and capital values grow moderately

Gross rents in Greater Tokyo averaged JPY 4,541 per tsubo per month in 4Q22, increasing 0.2% q-o-q and 2.8% y-o-y. Growth continued to be driven by new completions that asked for higher rents. Rents increased 0.1% q-o-q in the Bay area and 0.3% q-o-q in the Inland area.

Capital values in Greater Tokyo increased 0.1% q-o-q and 8.8% y-o-y in 4Q22, reflecting moderate rent growth and cap rate compression. A notable sales transaction involved Gaw Capital Partners acquiring Chiba New Town Logistics Center (GFA 51,000 sqm) for an undisclosed price. 

Outlook: Cap rates to compress further

According to Oxford Economics, the recovery of trade-oriented indicators is expected to continue in 2023. Industrial production should increase by 1.5%, while exports and imports should rise by 0.9% and 1.7%, respectively. Downside risks include a decline in exports due to the global economic slowdown and concerns about the deterioration of the domestic economy due to rising raw material prices. 

Average rents are likely to be on an upward trend, as rising land prices and construction costs pressure landlords to raise rents. This will likely be somewhat offset by downward pressure from major new completions that enter the market. Cap rates are expected to compress further with continued investors’ interest.

Note: Tokyo Logistics & Industrial refers to the Greater Tokyo prime logistics market.


Follow the link for more news on

Join Real Estate Asia community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!