Goodman has agreed to buy a logistics development site in Japan’s Ibaraki prefecture, snapping a quiet period for the Sydney-based warehouse specialist.
Breaking ground in late 2021, the developer plans to build a five-storey logistics and distribution facility with 176,000 square metres (almost 1.9 million square feet) of space on the 88,000 square metre site in Joso City, about an hour’s drive from central Tokyo.
No details about the price or the seller were disclosed. In a Wednesday press release, Goodman said the project would provide opportunities for retail, e-commerce and third-party logistics customers in a location with access to 15 million Greater Tokyo consumers.
“The Joso development will allow Goodman to continue to build on our track record of commitment to sustainability and providing best-in-class amenity for our customers,” said Goodman Asia head Paul McGarry. “Our consumer-centric approach is driving our growth and maintaining our relevance with customers.”
The Joso project is billed as Goodman’s most sustainable scheme yet in Japan, with features including up to 3 megawatts of solar power for usage by customers and plans for battery storage. The building will offer super-high-voltage power and health and well-being amenities, the company said.
The plot is situated next to the Joso Interchange on the Ken-O Expressway and not far from the Yawara Interchange on the Joban Expressway, two major transport and logistics routes in the Greater Tokyo area.
“The level and diversity of demand from our customers at this early stage is high, which we believe results from the strong value proposition for this development,” said Goodman Japan CEO Angus Brooks.
The logistics vacancy rate in Greater Tokyo was an estimated 1.5 percent as of June, according to CBRE’s Asia Pacific Market View report released earlier this month. Only Beijing’s 1 percent rate was tighter among key APAC cities.
Robust leasing activity in Greater Tokyo helped underpin record-breaking net absorption of 35.6 million square feet in major Asian markets during the first half of 2021 as large 3PLs and e-commerce occupiers remained in expansionary mode, the property consultancy said.
Back in Action
The always low-key Goodman has made its latest splash in Japan after a lull in Asian acquisitions since early this year, when it made a couple of asset buys in Hong Kong.
In February, the developer confirmed that it had bought the lower half of the Seapower Industrial Centre in Kowloon East’s Kwun Tong area from Samson Paper for HK$570 million ($73.5 million). Goodman was also reportedly the buyer when Samson sold Unit 2B and loading spaces on the second floor of Kowloon Bay Cargo Centre for HK$182 million in March.
Now the Australian firm is making a bet on a market that has lagged APAC peers in terms of new industrial investment. Logistics funds raised for Japan have moderated during the last year and a half, in contrast with soaring activity in South Korea, Australia and China, property consultancy JLL said in its recent report titled A New Trajectory for Logistics Real Estate in Asia Pacific.
“The attractiveness of the logistics and industrial asset class will only intensify in the eyes of investors,” said Regina Lim, JLL’s head of capital markets research for Asia Pacific. “In reality, institutional investors have just begun strategic reallocation of their portfolios and need to increase their exposure to logistics assets by 40-50 percent in the near term as they look to allocate capital into stable income-producing assets.”
Greater Tokyo’s development pipeline will see more than 80 million square feet of logistics space hit the market between 2021 and the end of 2023, according to CBRE.