Logistics real estate
The logistics real estate sector is a dynamic segment of the real estate industry. Its development is driven by changes in consumer behavior, supply chains, and technological advancements. Because of the changing and diversifying needs of shippers and consumers, logistics real estate has continued to evolve over the past few decades. Today, supply chain management and warehousing are often outsourced to third-party logistics (3PL) providers that help companies handle larger volumes of goods in a more cost- and time-effective manner. The emergence of third-party logistics operators has driven demand for large-scale multi-tenant logistics facilities that not only provide rental space for warehousing but also function as distribution centers. Modern logistics properties can be equipped with advanced technology that facilitates distribution processing and reduces labor costs.Recent developments in Japan’s logistics property market
The Japanese logistics real estate market has experienced an upward trend in recent years, driven by the expansion of the e-commerce market. During the pandemic, more consumers opted to make their purchases online, which led to an increase in the volume of goods shipped and thus increased demand for logistics space. Over the course of 2020, vacancy rates fell below one percent in Greater Tokyo, and investment in logistics facilities peaked at 662 billion yen.Since then, high levels of new logistics properties supplied to the market have caused vacancy rates to rise again. Supply was expected to remain high in the coming years, creating the potential for increased competition in the sector. The Japanese logistics industry is facing the so-called 2024 problem that is likely to intensify a labor shortage that is already looming over the industry. The 2024 problem refers to the introduction of new regulations that will come into effect in April 2024. The new laws are aimed at improving the working conditions of truck drivers and will restrict the allowed overtime hours in the sector. It is likely that demand for modern and cutting-edge logistics facilities will increase as a result of businesses trying to enhance their efficiency to respond to the looming labor shortage.
