Thursday, October 24, 2013
Supply Boom Lifts Vacancy Rates At Tokyo Logistics Bases
TOKYO (Nikkei)--Vacancy rate declines previously seen at large distribution facilities in the greater Tokyo area appear to have run their course as the completion of new bases lifts supply.
The rate stood at 4.3% on Sept. 30, rising 1.6 points from three months earlier and the first increase in a year, according to quarterly data tabulated by U.S.-affiliated real estate services group CBRE. It last stood at the 4% level in September 2012.
CBRE examined vacancy rates at 75 logistics bases of at least 33,000 sq. meters in the greater Tokyo area, including Kanagawa, Chiba and Saitama prefectures, as well as Osaka and Hyogo prefectures.
Supply-demand conditions appear to have loosened after a roughly 210,000 sq. meter facility developed by Mitsubishi Estate Co. (8802) and LaSalle Investment Management was completed in August in Sagamihara, Kanagawa.
Four more Tokyo-area facilities are slated for completion in the October-December period, while additional bases are poised to come onstream the following quarter as well.
"Vacancy rates are expected to climb to the 9% level in spring 2014," says a senior consultant at CBRE.
Demand remains strong, however, compared with 2008-09, when the vacancy rate topped 10%. "Rents will likely continue to rise, underpinned by solid demand for distribution facilities," says Takashi Ishizawa, chief real estate analyst at Mizuho Securities Co.
(The Nikkei, Oct. 24 morning edition)