Greater Tokyo to see a record level of new logistics supply in 2023

There will be over 4 million sqm of new supply.

According to a recent report by Savills, in Greater Tokyo, the pace of completions increased significantly, with nearly 3.0 million sq m of new logistics space introduced to the market in the first half of 2023. 

The largest completion was the 349,000 sq m multi-tenant facility, ESR Higashi Ogishima Distribution Centre 1. The 9-storey facility is now Japan’s tallest logistics facility. The report revealed that the development is located in Kawasaki City’s Higashi-Ogishima area, which is in close proximity to the Tokyo Bay area, and the facility will gain even greater accessibility with the completion of the Kawasaki Port Rinko Road, which is slated for completion in 2028. 

The development, which is located next to a large public park, also features a number of on-site amenities designed to attract workers, including free children’s day-care facilities, rest space for drivers, 24-hour stores, and bowling alleys. 

Here’s more from Savills:

Meanwhile, the 205,000 sq m Tokyo Ryutsu Center Distribution Bldg.A is slated for completion in August 2023. Located in Ota ward, Tokyo, the facility will have direct access to the 23W and Greater Tokyo market via the Metropolitan Expressway and Loop Road No.7, while direct public transport connections to the Tokyo rail and bus systems will ensure convenient access to the site for employees. 

Looking forward, the largest upcoming development in 2024 in Greater Tokyo will be the MFLP LOGIFRONT Tokyo-Itabashi, which will reportedly have a GFA of around 256,000 sq m. The facility is located within the 23W, and will likely appeal to tenants given its proximity to the city centre and convenient public transport access, as well as to the Metropolitan Expressway. Developers will likely aim to distinguish the property with its large-scale modern cold storage capabilities and specialised zone dedicated to conducting R&D and implementing last-mile drone delivery services. 

Overall, the Greater Tokyo market will welcome a record 4.4 million sq m of new logistics supply in 2023, which may exacerbate concerns regarding vacancy rates going forward due to heightened competition for tenants.