Demand from 3PLs and online retailers continues to expand

• 3PL companies are increasingly relocating and expanding their logistics facilities throughout Greater Tokyo.
• As rents rise throughout Greater Tokyo, demand for relatively more affordable properties in fringe areas is recovering.

Overall vacancy declines by 0.6 pp q-o-q to 8.2%

• In Q1 2026, six facilities entered the market, and total stock increased by 1.8% q-o-q. Two of the new facilities were fully occupied.
• Vacancies in existing properties decreased significantly in the Gaikan Expressway area.

Rental growth trend continues

• Gross rents in Greater Tokyo averaged JPY 4,823 per tsubo per month in Q1 2026, up 0.9% q-o-q. Rent increases were most pronounced in prime locations.
• Capital values in Greater Tokyo rose by 0.1% q-o-q and 1.2% y-o-y in Q1 2026, reflecting rental growth. Although interest rates are rising, expectations of rent increases offset this, resulting in little change in cap rates.

Outlook: Rents to continue rising, cap rates remain flat

• With vacancies decreasing and construction costs rising, rents are expected to increase, especially for properties in prime locations.
• Cap rates are expected to remain unchanged, as expectations for rental growth are likely to offset higher interest rates. As a result, property values are expected to rise in line with rent increases.