Demand from 3PLs and online retailers continues to expand

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

Overall vacancy declines by 0.5 pp q-o-q to 7.7%

• In Q2 2026, four facilities entered the market, increasing total stock by 0.9% q-o-q. Two of the new facilities are fully vacant, while the other two have high occupancy rates.
• Vacancies in existing properties continue to decrease, particularly in Western Tokyo area and Route 16 area.

Rental growth trend continues

• Strong demand and rising construction costs have driven rents to continue increasing throughout Greater Tokyo, particularly in prime locations such as Tokyo Metro Bay and Chiba Bay. An increasing number of landlords are introducing CPI-linked rents and shortening lease terms. 
• Capital values in Greater Tokyo remained increased 0.9% y-o-y in Q2 2026. Although rents are rising, higher interest rates are partly offsetting this, resulting in gradual increase in capital values. 

Outlook: Rents to continue rising; cap rates expected to rise slightly

• With vacancies decreasing and construction costs rising, rents are expected to increase further, especially for properties in prime locations. However, properties located in fringe areas with substantial competition and lift-access facilities with relatively high vacancy are likely to experience more limited rental growth.
• Cap rates are expected to rise, but only slightly, as expectations for rental growth should partly offset higher interest rates. As a result, capital values are expected to rise, albeit at a gradual pace.