CBRE today released data on rental market trends during the third quarter of 2012 for large multitenant logistics facilities in Greater Tokyo and Greater Osaka.
Noteworthy trends
* Despite the first rise in five quarters, the Greater Tokyo area vacancy rate remained?low at 4.6%.
* The vacancy rate in Greater Osaka fell significantly to 1.9% as progress was made in filling vacancies at new facilities; occupancy at existing facilities remains at 100%.
* Scarce availability of large prime logistics facilities became evident from the firm demand; the supply-demand balance continues to be tight.
The Q3 2012 the vacancy rate for the Greater Tokyo area rose for the first time in five quarters to 4.6% due in part to one facility being completed during the quarter with vacancies available, and short-term contracts terminating for large contiguous spaces. Despite this increase, it was the third consecutive quarter of vacancy rates remaining at levels under 5%, and the vacancy rate of existing facilities remained at a low 3.2%. With the firm demand, large contiguous space has become scarcely available, pushed by continuing limited availability of large-scale facilities, and rising rent levels at facilities located in favorable locations.
Activity this quarter included operational expansions among food, apparel and Internet retail distributors. There were also cases of cost cutting initiatives that included potential reconfiguration of the tenancy area, followed by companies starting to consider relocating from the coastal area to the inland areas after the earthquake as a BCP measure.
In Greater Osaka, the vacancy rate fell to 1.9% this quarter from 8.8% the previous quarter, with the filling of vacancies by a large scale facility completed last quarter. With inquiries growing more numerous, unfilled vacancies are expected to be filled?rapidly. Meanwhile, the occupancy rate at existing buildings remained at 100% for the third consecutive quarter.
?In both Greater Tokyo and Greater Osaka, strong demand and scarcity continue at large prime facilities, and rents continued to rise at some of these facilities across Tokyo,??said Junichi Taguchi, Managing Director of Industrial Services at CBRE. ?Although supply is expected to increase from Q2 2013 onwards, leasing at facilities scheduled for supply is proceeding quite smoothly compared to the period of large supply we experienced in 2008.??
Vacancy rate computation standards
* Subject regions: Greater Tokyo / Metropolitan Tokyo, Chiba prefecture, Saitama prefecture, Kanagawa prefecture, Greater Osaka / Osaka prefecture, Hyogo prefecture
* Subject buildings: Facilities with floor area of 10,000 tsubo or more
In principle, facilities planned/designed under the presumption of multi-tenant use at time of?development
-Greater Tokyo: 57 buildings -Greater Osaka: 12 buildings
* Vacancy Rate computed at end of months: (1) March, (2) June, (3) September, (4) December
Vacancies are those that are ready to receive tenants at time of survey (newly built facilities are those on which construction is complete).
For detailed data and market conditions for each zone and metropolitan area, visit our website at http://www.cbre.co.jp
About CBRE Group, Inc.*
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world?s largest commercial real estate services firm (in terms of 2011 revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at www.cbre.com. *
DISCLAIMER: Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
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