The logistics sector in Greater Tokyo is adapting to a surge in new supply, with vacancy rates rising to 7.7% in the first half of 2024. This increase, up 0.6 percentage points over the past six months and 1.6 percentage points year-on-year, reflects the substantial addition of new logistics facilities to the market.
Notably, 60% of the new supply for 2024 was introduced in the first half of the year. This concentrated influx of new facilities is expected to be absorbed more effectively in the latter half of the year, helping to stabilize the market and mitigate further increases in vacancy rates.
Despite the rise in vacancy rates, average asking rents in Greater Tokyo have reached new heights, surpassing the previous record set in 2022. Rents have increased by 4.3% quarter-on-quarter and 6.6% year-on-year, reaching JPY4,820 per tsubo. This growth is driven by higher construction costs and premium properties in sought-after locations. However, most market rents have remained stable, with prime facilities commanding higher rates and older properties maintaining more consistent rental values.
In a positive contrast, the logistics market in Greater Osaka has seen a slight tightening in vacancy rates, down 0.3 percentage points over the past six months and up just 0.1 percentage points year-on-year, reaching 2.7%. The forecast for moderate new supply suggests continued stability in this market, with rents contracting slightly by 1.4% quarter-on-quarter but remaining steady year-on-year at JPY4,180 per tsubo.
Overall, the logistics sector in both Tokyo and Osaka is demonstrating resilience and adaptability in response to changing market conditions, reflecting a robust and evolving supply chain landscape.
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