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Japan’s logistics market sees increased supply in 2018



Japan’s logistics market sees increased supply in 2018

Japan’s logistics real estate market may see some price softening next year as new supply outpaces demand, opening up potential opportunities for new investors to enter the market.

As J-REITS and non-listed core capital from institutions such as Deutsche Bank and Morgan Stanley see opportunities in Japanese logistics amid ultra-low interest rates, the market could potentially soften in 2018, according to Pelham Higgins, from JLL’s Industrial Capital Markets team in Tokyo.

The logistics focused J-REIT Japanese Logistics Fund (JLF) recently acquired two assets—the Yokohama Machida Logistics Centre and the Takatsuki Logistics Centre—amounting to US$246 million (JPY 27 billion). These new acquisitions took the total value of JLF’s portfolio to US$2.44 billion (JPY 268 billion).

“The Yokohama Machida Logistics Centre deal was concluded at a sub-4 percent NOI (net operating income) capitalisation rate (cap rate), and it’s not the only one that has recently traded at this level, which tells me the market might be ready for some cooling,” he says.

“These transactions were not in prime locations and their pricing levels would suggest that the prime Tokyo logistics cap rate currently sits around 3.7 percent NOI, which is now 100 basis points sharper (lower) than where they were in 2007 just before the Global Financial Crisis (GFC).”

According to JLL’s Tokyo Logistics Report for the second quarter of 2017, capital values increased 2.3 percent quarter-on-quarter or 6.9 percent year-on-year in the three months to June, rising for the second consecutive quarter.

JLL expects capital values to rise in the near term, reflecting a continued compression in cap rates as well as intensifying competition arising from new players entering the market on the back of a lack of tradeable assets in other property sectors.

However, the current record low yields in the Japanese logistics market, coupled with a lot of new supply coming on to the market in 2018 – particularly in greater Tokyo – is expected to put some upward pressure on these ever declining cap rates. This is further supported by JLL’s research which states that the logistics rental market is in the phase of slowing growth as a result of new supply – especially in certain sub-markets.

“J-REITs are buyers for about 50 percent of the deals in Japan but many of them cannot compete with non-listed core capital who are hungry for Japanese logistics,” says Higgins.

Another private core fund sponsored by the Development Bank of Japan was reported to be the buyer behind a recent Mapletree logistics sale in greater Tokyo which also traded at a very sharp yield.

Valuations for logistics assets have risen in recent years, driven by the continued growth in third-party logistics (3PL), e-commerce demand, and general supply chain reconfigurations to improve competitive efficiencies. At the same time, logistics property stock has been increasing aggressively to meet the growing demand from investors and some occupiers.

“At this stage supply is outpacing demand – especially in Tokyo and Osaka where vacancy rates are starting to climb,” says Higgins. “This will be even more of an issue in 2018 when more than 2 million square meters of supply hits the greater Tokyo market, a lot higher than the 1.4 million square meters of average annual supply experienced over the last three years.”

“We are confident that this new supply will eventually be absorbed, but until the majority of the new space has been committed to asset pricing is likely to soften in certain logistics sub-markets,” he says

In 2016, total investment in logistics facilities was JPY 850 billion, a significant increase of 111 percent from the previous year. Seventy percent of the investment in the logistics market involved acquisitions by large local developers and their affiliates, while institutional investors, corporates and real estate firms which do not develop facilities themselves, account for the remaining 30 percent. According to the JLL report, sustained solid demand for logistics assets may give rents a moderate boost in the coming quarter. There are, however, pockets of over supply to be aware of according to Higgins who cites the north-east quadrant of greater Tokyo where much of the new supply in 2018 will be witnessed.

According to JLL, a potential softening of occupancy rates and pricing in the short-medium term represents a good opportunity to enter the market as the sector offers relatively stable rental income. Following the GFC in 2008, office rents in the city centre dropped by between 40 and 50 percent, while rental values for logistics facilities fell by only around 10 percent. Additionally, e-commerce growth and general supply chain rationalization in Japan is expected to continue to drive strong leasing demand for logistics facilities in the longer term, says Higgins.

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The Bachelor Japan Season 4 showcases Thailand



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Bangkok, 2 December, 2021 – The Tourism Authority of Thailand (TAT) is pleased to report that Thailand features as the main location in the Japanese reality TV show ‘The Bachelor Japan Season 4’, of which the first episode aired on 25 November, 2021.

In cooperation with the TAT Tokyo Office, a film crew from Amazon Prime Japan and YD Creation Japan comprising 65 actors, production staff, technicians and others travelled to Thailand to shoot for the show in the spectacular Southern provinces of Phuket, Phang-Nga, and Krabi between April and June 2021.

A total of six out of the 10 60-minute episodes of ‘The Bachelor Japan Season 4’ were filmed in Thailand.

 Aside from the valuable promotional exposure the destination will receive in Japan, a key source market for visitors from the Asian region, the foreign production also generated much-needed income and employment opportunities in the local tourism and film-related sectors of the three chosen locations.

Phuket, Phang-Nga’ and Krabi were among the first destinations in Thailand to reopen to tourism under the Sandbox programme, and the TAT Tokyo Office has capitalised on the interest of foreign filmmaking to promote the world-class tourist appeal and public health safety standards of these destinations.

Mr. Yuthasak Supasorn, TAT Governor, said “Popular TV shows like ‘The Bachelor’ are an effective way to deliver promotional messages directly to international markets, in this case Japan, which is among the 63 countries and territories from which fully vaccinated visitors can enter Thailand through the Exemption from Quarantine (TEST & GO) programme. With Thailand featuring so significantly in ‘The Bachelor Japan Season 4’, this helps us to promote travel to Thailand now that entry rules are being relaxed and tourists are once again welcomed.”

Fully vaccinated visitors from every country around the world can also visit Thailand via the Living in the “Blue Zone” Sandbox destinations programme. Meanwhile, partially or unvaccinated visitors are also much welcomed via the Happy Quarantine programme. However, to prevent and control the spread of the new Omicron COVID-19 variant, Thailand currently imposes travel restrictions on arrivals from Africa.

Photo Credit: Instagram: @BachelorJapan外部リンク, @bachelorjap外部リンク

The post The Bachelor Japan Season 4 showcases Thailand appeared first on TAT Newsroom.

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ASEAN commemorates Youth in Climate Action and Disaster Resilience Day 2021

An intergenerational dialogue titled ‘Teaming up with You(th) for a Disaster-Resilient and Climate-Friendly ASEAN’, was moderated by the ASEAN Youth Forum’s Programme Manager, Rastra Yasland.




JAKARTA, 30 November 2021 – The ASEAN Secretariat hosted an interactive webinar to commemorate ASEAN Youth in Climate Action and Disaster Resilience Day on 25 November.

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