Commercial Real Estate News
Demand for Expanding Japan's Logistics Infrastructure Continues to Grow in 2022
According to CBRE's 2022 Japan Occupier Survey of Logistics Facility Usage survey, demand to expand and modernize Japan's logistics facilities continue to grow.
When asked what measures would be prioritized over the medium term (the next three years), 56% of respondents indicated that focus would be placed on opening new logistics facilities or expanding locations and floor area. This was the top priority initiative for one in three companies, suggesting that tenant demand for logistics facilities is likely to remain firm in the medium term.
Other measures that were raised by a significant number of companies centered upon the issue of labor shortages, including "introducing/enhancing mechanization and automation" and "improving the working environment and safety of employees". The fact that "upgrading existing facilities and equipment" was identified as a priority by a fairly large percentage of respondents also underlines the tenants' focus on modernizing and improving the efficiency of logistics facilities.
"Strengthening the transportation and distribution network" and "consolidation and relocation of facilities" were also raised as key issues by many companies. In addition to the already pressing issue of labor shortages, logistics tenants are now facing the "2024 problem", which will see the stricter enforcement of truck driver overtime restrictions. Moreover, rising fuel prices are creating an additional burden. The survey results reveal that amid this increasingly austere business environment, moves are underway to restructure logistics networks in a more efficient manner.
Few tenant companies acknowledged "ESG initiatives" as a key priority. However, the proportion of respondents who mentioned ESG initiatives showed an increase from the 8% recorded last year to 14% this year. When combined with the responses given to the questions concerning environmental performance, environmental consciousness of tenants is clearly on the rise.
