Industrial Insights

"The logistics sector remains resilient, supported by robust demand. The declining development pipeline should tighten market conditions further. Investor sentiment remains strong, as reflected in elevated 2025 transaction volumes."

"The logistics sector has been resilient despite the large supply seen in recent years and is positioned for a brighter outlook as supply begins to ease. Investment sentiment remains strong, with high-value transactions making headlines over the fi rst half of 2025. The anticipated slowing in new supply after 2025 will give the logistics market further momentum for absorption. Additionally, logistics operators have been incorporating new technologies to enhance operational effi ciency to address labour shortages, further strengthening the sector’s resilience over the longer-term outlook."

"Japan's logistics sector has been resilient despite challenges in recent years, and is poised to reap the benefits in the midterm. As such, logistics assets have kept popular among investors, with large transaction volumes seen in 2024. While new supply will be elevated this year, the noticeable decline in new supply beyond 2025 will create more breathing room and support leasing activities among existing properties with vacant space. Additionally, many logistics operators have continued to enhance operational efficiency in response to chronic labour shortages, which should further strengthen the sector’s resilience and longer-term outlook."

"Overall demand in the logistics sector remains sound, but high levels of new supply in recent years have kept vacancies on a rising trend. In addition, many challenges, including global uncertainties, labour shortages, interest rates, and construction costs, have kept many players on their toes. That said, the logistics market is evolving, with strong fundamentals in a longer-term timeframe. In the interim, prime logistics facilities with modern amenities in accessible areas should continue to perform well, although older facilities in less convenient areas are likely to face challenges."

"The logistics sector continues to perform well overall, but the large new supply over the past year has loosened the market, with vacancy rates rising as some new properties struggle to fill available floors. The industry will face a number of challenges moving forward, including the sustained influx of new supply and labour regulations that may dampen operations. While prime logistics facilities remain fully occupied and even display rental growth, older facilities with outdated specifications in less desirable locations are expected to keep struggling."

"The resilient fundamentals and growth potential of the e-commerce industry offer a long-term positive outlook for the logistics market, which has led to the large upcoming supply. However, even sound demand is struggling to keep pace with the elevated supply in the market, and the industry also faces headwinds such as labour shortages and inflation. Although fundamentals remain strong, the market is likely to undergo a phase of adjustments for the time being."

"The strength in the occupational market, with its historically low vacancy rate, persistent rental growth and rebound in macro drivers, is sustaining investor interest and attracting new capital."

"As the e-commerce industry continues to expand, the demand for logistics services remains strong. However, a combination of substantial upcoming new supply and cost pressures on tenants due to inflation and labour shortages make rental growth increasingly difficult. Interest rate increases also threaten to soften yields, and investors might look to other sectors for opportunities."