Iwatsuka Logistics Facility in Nagoya is the third logistics facility that LaSalle has unveiled this year (Image: LaSalle).
LaSalle Investment Management is ready to break ground on its third Japanese logistics facility in less than a month with the private equity unit of JLL partnering with local developer Nippo Corporation for a 80,740 square metre (869,080 square foot) warehouse in Nagoya.
The Japanese unit of LaSalle said that it will start work on a multi-tenant logistics facility near the centre of Japan’s fourth largest city on 1 February, according to a press release late last week.
“In the process of improving the efficiency of logistics by various companies, there is a growing need for modern logistics facilities located in areas with excellent transportation convenience,” LaSalle said in the statement. “We believe that supporting the increasing demand for logistics from the perspective of real estate will contribute to the development of the market.”
The announcement came three days after LaSalle, which had started over 12 logistics projects in Japan since 2021, held a groundbreaking ceremony for a 49,137 square metre logistics facility near Tokyo. Earlier this month, the firm unveiled a 78,938 square metre shed in Greater Osaka.
Japanese industrial assets continue to be favoured by global investors, with logistics rents in Greater Nagoya rising to JPY 1,095 ($7.4) per square metre at the end of September, up 0.8 percent from June, as net absorption of warehouse space in the region reached a record-high of 343,802 square metres, according to a report from CBRE.
Stopover Hub
LaSalle’s Nagoya project is a four-storey warehouse with a central ramp to allow vehicles to directly access the first two floors of the building. Scheduled to complete in June 2025, the shed will also incorporate cold storage capabilities.
Provisionally named Iwatsuka Logistics Facility, the project is around 1.7 kilometres (1 mile) from the Nagoya Expressway Route 5 Manba Line and 4.8 kilometres from Nagoya train station.
Keith Fujii is the head of Asia Pacific at LaSalle
With Japan’s “2024 problem” set to limit overtime for truck drivers from April of this year, LaSalle noted that the warehouse is positioned to serve as a stopover between the Tokyo metropolitan area and the Kansai area, which incorporates Osaka, Kyoto, and Shiga.
Located 30 minutes’ drive from Nagoya castle, the facility will incorporate solar installations to generate electricity, along with protections against natural disasters, including flooding countermeasures and emergency generators.
The facility will be built adjacent to a 354,744 square metre logistics project which LaSalle and Nippo completed in July last year.
With Nagoya as its capital, Aichi prefecture is home to some of Japan’s largest manufacturers and hosts Toyota and Mitsubishi car factories.
In 2020, industrial players in Aichi shipped a total of JPY 44 trillion worth of manufactured goods, the highest among Japan’s prefectures that year. That figure was more than double the level of goods shipped by Osaka, which ranked second that year at JPY 17 trillion.
Highlight on Japanese Logistics
LaSalle is building out its Japanese logistics portfolio amid a larger wave of overseas players betting on the country’s industrial sector.
In December GLP broke ground on a 84,500 square metre warehouse near Tokyo, with the Singapore sovereign fund announcing that same month that it had acquired a pair of sheds in Greater Osaka and Greater Fukuoka from Daiwa House Industry. Those purchases were GIC’s eighth and ninth pick ups of Japanese industrial assets from Daiwa House in 2023.
In November, Hong Kong-listed ESR announced that it was ready to start work on a 306,000 square metre logistics facility in Kanagawa prefecture near Tokyo, with the project expected to have a value in excess of $2.5 billion once completed.
Transactions of logistics properties in Japan grew at the highest rate of any sector in the country last year, with investors committing JPY 278.6 billion to warehouses in Asia’s second-largest economy in the first nine months of 2023, up by 300 percent from the same period in 2022, according to data from MSCI Real Assets.