Cushman & Wakefield (C&W) released its "Logistics Facilities Report for the First Half of 2025" on September 11.
<Logistics Facilities Report for the First Half of 2025>
According to the report, asking rents are on an upward trend, mainly reflecting increased costs due to soaring construction expenses. In actual contracts, there has been an increase in the provision of rent-free periods (rent-free periods) to attract tenants. This trend is particularly driven by submarkets with oversupply. As a result, real rent levels are on a downward trend, and the gap between nominal rent and real rent is widening.
On the other hand, some properties such as MFLP Yokohama Shinkoyasu, MFLP Tsukuba Mirai, GLP Yachiyo V, Landport Yokohama Sugita, and ESR Kawanishi DC2 have reached full occupancy or have filled all vacancies, making it difficult to say that the market is completely stagnant. A moderate demand trend continues across the market. For tenant companies, securing and retaining talent remains a key challenge, and the functionality and convenience of facilities are important evaluation criteria when selecting a location.
In the case of existing properties, some landlords are necessitating rent revisions (increases) due to rising construction costs and maintenance/repair expenses. While tenants show some understanding in light of recent price increases, the slowdown in cargo movement due to decreased volume of goods, increased cost consciousness, and high vacancy rates in some submarkets have led to rent revision agreements being decided on a case-by-case basis, resulting in limited overall progress.
As of June 2025, freight volume recorded a 7.1% decrease year-on-year in terms of tonnage and a 0.1% decrease in terms of ton-kilometers. NX Research Institute's freight movement index has recorded double-digit negative figures for nine consecutive quarters since the first quarter of 2023. The outlook for the third quarter of 2025 is also projected to worsen further from the previous quarter, at -11 points.
Transportation capacity is limited by a chronic labor shortage, coupled with a slowdown in personal consumption due to rising prices and a decrease in new housing starts and public works projects due to soaring construction costs, hindering the recovery of logistics demand. Furthermore, companies are also facing increased costs, with logistics expenses as a percentage of sales by industry rising across the board over the past 12 months. In particular, the food and beverage wholesale sector saw an increase from 5.7% in 2023 to 9.1% in 2024. In the food (refrigerated and ambient temperature) sector, some companies responded by saying they had to comply with requests to raise warehouse operating costs due to soaring electricity and energy prices. Conversely, this can be seen as a result of logistics providers passing on price increases to a certain extent.
The impact of the "Trump tariffs" agreed upon between Japan and the United States remains unknown at this point, particularly for sectors such as automobiles, machinery, and steel.
■Report
MARKETBEAT Japan Logistics Facilities First Half of 2025
