Research Tokyo Logistics Market Dynamics Q2 2025
Tokyo Fundamentals
• Demand from 3PLs and online retailers continues to expand. • Overall vacancy remains unchanged at 10.3%. • Rent growth trend continues.
YTD net absorption YTD completions Vacancy rate Gross rent Rent growth Y-o-Y Stage in rental cycle
920,300 s.m. 1,213,000 s.m. 10.3% JPY 4,704 per tsubo p.m. +1.4% Growth Slowing
Note: Tokyo logistics refers to the Greater Tokyo prime logistics market. Data is on an NLA basis.
Demand pushed net absorption to 332,000 sqm in Q2 2025. This was down 43% q-o-q, primarily due to reduced supply. As transport costs rise, demand is strong for properties close to the city centre with short transportation distances, while properties in fringe areas with higher transport costs are struggling to find favour.
pushing up rents for existing properties. Capital values in Greater Tokyo rose 0.4% q-o-q and 1.1% y-o-y in Q2 2025, reflecting rent increases. Notable sales transactions included the portfolio acquired by Fortress Investment Group and sold by GLP J-REIT.
New supply totalled 358,000 sqm in Q2 2025, increasing total stock by 1.5% q-o-q. Four facilities entered the market. All four are located in the Tokyo Inland area, with two located in the Ken-O Expressway area. The vacancy rate in Greater Tokyo was 10.3% for Q2 2025, unchanged q-o-q and up 64 bps y-o-y. The vacancy rate in the Bay Area fell to 8.4%, a decrease of 18 bps q-o-q, while in Tokyo Inland it remained unchanged at 11.0%.
As demand continues to grow and construction costs rise, rents are expected to grow, especially for properties in areas with good access. However, given the higher vacancy rates and increases in transportation costs, rents are under downward pressure in fringe areas. Interest rates are expected to rise further. Nevertheless, there is strong investment demand from both core investors, such as insurance companies, and value-add investors, and investment yields are expected to remain stable. Capital values of properties in good locations are expected to rise, coupled with growing rents.
Gross rents in Greater Tokyo averaged JPY 4,704 per tsubo per month in Q2, up 0.6% q-o-q and up 1.4% y-o-y. Rising construction costs are pushing up rents for newly supplied properties, which in turn is
Historical supply and demand trends s.m. (thousands) 3,000
12%
10%
Outlook
2,000
8% 6%
1,000
4% 2%
0
0% 2020
2021
Net absorption
2022
2023
2024 YTD 2025
New supply
Vacancy rate
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