GLP Japan Preps for Cold Storage Demand as E-Commerce Soars

The head of Japan’s second-largest logistics operator took the stage at Tuesday’s Mingtiandi Tokyo Forum with a frosty message: cold storage is shaping up as the big warehouse trend for 2025 in the world’s fourth-largest economy. Watch the full recording>>

That and other insights were on the agenda as Yoshiyuki Chosa, Japan president of GLP Capital Partners, sat down with Mingtiandi founder Michael Cole for a spotlight interview during the full-day event, which was sponsored by Yardi. The two touched on topics including the history of the warehouse industry and the future of GCP Japan’s platform of 139 operating properties with a total asset valuation of $17.9 billion.

Where chilly sheds are concerned, a recent account in Nikkei Asia said parent GLP planned to expand its cold facilities in Japan by 1.9 times the current total floor area to 430,000 square metres (4.6 million square feet) by 2028. Mingtiandi reported last year that the industrial specialist had begun building two fully refrigerated cold storage warehouses in the Kansai region with a total floor area of 55,000 square metres, after previously retrofitting 22 existing sheds for frozen and refrigerated use.

“Cold storage is a sector that we have a keen eye on,” Chosa told the audience of 200 delegates at the Mandarin Oriental Tokyo. “Cold storage looks like the warehouse industry 20 years ago, when everything was old and obsolete and there were no modern, functional, efficient warehouses. So I think cold storage will be big.”

Shed Sector Evolution

Chosa traced the history of logistics as a real estate sector in Japan back to the year 2000 when GLP’s co-founder, the late Jeffrey Schwartz, arrived in the country with a plan to build a network of modern facilities. In that period following the collapse of Japan’s asset bubble in the 1990s, warehouses were owned instead of rented and manufacturers and retailers ran their own sheds.

“Everybody wanted to own assets because they only appreciated,” Chosa said of boom-time corporate strategies. “So it made sense back then to own and operate your own logistics. And I think there was some ego and pride that you didn’t want to mix your goods with others. There was no idea of 3PL (third-party logistics), so everything was owned and operated by themselves until the bubble burst and owning assets became a burden.”

Chosa recalled that capital markets pressured companies to reduce costs and improve efficiency in the hope of boosting share prices. A 1997 law on real estate securitisation made property investment easier. “And that’s when we came into the market and said okay, we’ll build it for you. Why don’t you rent from us? But everything was customised because if you’re an electronics company, you won’t be designing warehouses to handle cosmetics or anything else other than your product.”

The next stage of Japan’s logistics revolution saw the rise of 3PLs working hand-in-hand with developers on built-to-suit warehouses, helping businesses realise efficiencies that they might have missed if they had used their own people to build their own sheds, the GCP Japan president said.

Scaling Up for Shopping

With Japan’s logistics market still under pressure to cut costs and boost efficiency, GLP in 2019 launched its Alfalink series of industrial parks, which integrate supply chain elements including R&D, factory, cold storage and transport terminal in a single property. By the end of June, the company had completed 8 million square metres of projects in Japan, with a further 2.9 million square metres under development or in the pipeline.

Alfalink mega-projects include an 800,000 square metre industrial park nearing completion in Akishima, on Tokyo’s western fringe, and finished facilities at Nagareyama (900,000 square metres across eight buildings) and Sagamihara (680,000 square metres across four buildings), both in Greater Tokyo.

After the COVID pandemic accelerated e-commerce user penetration, demand for warehouse space remains “unprecedentedly high” despite GCP “jacking up” rents, according to Chosa. E-commerce platforms like Amazon must fill orders for hundreds of thousands of different kinds of goods, destined for tens of thousands of households, all with a margin of error less than 0.1 percent.

“You need to be operating in an efficiently designed warehouse,” Chosa said. “It’s not an old and obsolete warehouse, and there’s just not enough of that (property type). So it’s not that the population is growing or the consumption is growing, but the shift, and the way logistics is being handled because of lifestyle changes, that is what’s driving the demand.”

An Interview in Pictures