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Logistics Real Estate
HandbooK - 2013
Table of Contents
Forward
Table of Contents
i
ii
Chapter 1 Introduction to Japan
Logistics Real Estate
1.1 Japan Outlook
1.2 Japan Real Estate Market
1.3 Definition of Modern Japanese
Logistics Facility
1.4 Why Japan Logistics Real Estate?
1.5 Global City Comparisions:
Logistics Real Estate
1.6 Is Japan logistics real estate going to
reach saturation point?
18
Chapter 2 Logistics Real Estate
Investment in Japan
2.1 Investment Methodology
2.2 Fund Investment
2.3 J-REIT Market
2.4 Securitization
2.5 Due Diligence
2.6 Mergers & Acquistions (M&A)
22
23
24
27
30
38
Chapter 3 Japanese Logistics Real
Estate Players
3.1 Market Players
3.2 Transactions & Cap Rates
3.3 Development Plans
40
47
49
Chapter 4 Third-party Logistics (3PLs)
4.1 Global 3PLs
4.2 Japanese 3PLs
4.2.1 Case Study - DHL
4.2.2 Case Study - Senko
4.3.3 Case Study - Nippon Express
55
57
59
61
64
Chapter 5 E-Commerce in Japan
5.1 E-Commerce Market
5.2 Case Study - Amazon Japan
5.3 Case Study - Rakuten
5.4 Case Study - Yahoo・Askul
67
71
75
79
ii
Bear Logi Co.,Ltd
1
6
9
12
14
Chapter 6 Infrastructure
6.1 Japan Roads
6.1.1 Tokyo Roads
6.1.2 Osaka Roads
6.1.3 Nagoya Roads
6.2 Japan Airports
6.2.1 Tokyo Airports
6.2.2 Osaka Airports
6.2.3 Nagoya Airports
6.3 Japan Ports
6.3.1 Tokyo Ports
6.3.2 Osaka Ports
6.3.3 Nagoya Ports
6.4 Customs and Port Union
82
86
88
90
92
95
97
99
100
102
104
105
106
Chapter 7 Developing Japanese
Logisitcis Real Estate
7.1 Zoning and Land Use
7.2 Contracts
7.3 Japan Land Prices
7.4 Construction Process
7.4.1 Warehouse History & Trends
7.4.2 Construction Prices
108
112
114
121
125
129
Chapter 8 Supply, Demand & Absorbtion
8.1 Supply - Japan
130
8.1.1 Supply - Tokyo
135
8.1.2 Supply - Osaka
136
8.1.3 Supply - Nagoya & others
137
8.2 Demand & Absorption
138
Chapter 9 Rents
9.1 Rents - Overview
9.2 Rents - Tokyo
9.3 Rents - Osaka
9.4 Rents - Nagoya
9.5 Rents - Other
144
146
149
151
152
Appendix
Glossary of terms
153
170
www.bearlogi.jp
1.1 Japan Outlook
upper house election due end of July 2013, the
LDP has a number of sensitive political and
structural issues:
* China territorial disputes;
* Japan’s alliance with the US and Abe’s desire
to expand the role of the military;
* Renewed attention on Asia, with focus on
Myanmar, Indonesia, Philippines, Vietnam and
Thailand;
* Ageing infrastructure; population and a
shrinking tax base;
* Implementing the proposed increase in sales
tax;
* Deflation and high Yen;
* Trans-Pacific Partnership (TPP); &
* Energy & shutdown of Daiichi nuclear power
plant in Fukushima.
Purchases
2013 may be the year where capital purchases
are brought forward due to the various stimulus packages combined with the consumption
tax rising in 2014 from 5%. In addition to the
government stimulus packages, the falling Yen
may encourage people to bring forward their
planned purchases.
Infrastructure
‘Abenomics’ is the term coined for the
economic policies of the newly elected LDP.
The LDP has traditionally been large spenders
on public works projects and Abe has
announced a series of stimulus packages since
coming to power to give Japan a ‘rocket start’
as he described it in 2013. Much of the spending will focus on maintenance and earthquake
proofing of aging infrastructure which if
appropriately directed will definitely benefit the
logistics sector.
Energy
Whilst a weakening yen is good for Japanese
exporters, it does pose a problem for rising fuel
imports. After the March 2011 meltdowns at the
2
Bear Logi Co.,Ltd
Fukushima No. 1 plant almost all of the nation’s
nuclear reactors still remain off line for safety
reasons. These reactors are unlikely to restart
quickly due to stricter testing procedures,
including earthquake fault line reviews. Therefore, cheaper power to drive the economy will
not be solved in the short term and Japan will
remain reliant on energy imports.
Japan is the world’s largest importer of LNG,
second largest importer of coal and the third
largest net importer of oil. In fact such is the
dependency on this imported energy that the
increase required to offset the loss of nuclear,
pushed Japan into a large trade deficit in
December 2012 of ¥641.5 billion (see figure 2).
In the longer term Japan will shift to green
energy and this has commenced with the
governments feed in tariff program for
renewable energy which has proved very
popular. However the scale and Japan’s
dependency on cheap energy which Nuclear
helped to deliver remains a threat to any
economic growth and oil and LNG prices should
be closely monitored.
In relation to logistics and transport within
Japan, many trucking companies have tried to
impose fuel surcharge levies, but given the
current tough competition many logistic
companies are absorbing this fuel cost to get
cargo. Any substantial increase in fuel cost due
to a weakening yen will affect logistic companies
and therefore their ability to pay higher rents in
warehouses.
Deflation
Only time will tell if the LDPs policy will re-inflate
the economy to anything that is sustainable.
Japan has had deflation for so long that its
people are accustomed to it and the cheap
prices that go with it. It is hard to see with record
numbers of University graduates failing to find
employment and an increasingly casual labor
force getting the pay rises that an
inflationary environment would necessitate.
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1.3 Description of Modern Japanese Logistics Facility
Figure 11: Description of Modern Japanese Multi-Level Logistics Facility
Single sided berth
Center berth
Height & Columns
A berth is the area directly
in front of the warehouse
“docks” where trucks re verse to allow rear access.
The berth is connected via
an access drive that runs
along the side of the facilty
known in Japan as a “shallow“. May be single or
double sided “cross dock”.
A center berth refers to
an access drive that runs
through the middle of
facilty “shallow” allowing
access to truck docks on
either side. This is wider
than a single sided berth
and allows trucks to enter center road from both
sides simultaneously.
Japanese logistics facilities are usually multistorey due to high land
prices. Column widths
should be at least 8m
wide and floor to ceiling
“clear height” at least 5m
free of obstruction. Fire
laws require walls/shutters for every 1,500m2 .
Fire shutter
& walls
Side Berth
Center Berth &
access ‘Shallow’
Column width
more than 8m
Dock and Floor
A dock is where goods are
loaded/unloaded.These
may be raised above floor
level to align with rear of
truck door or be at ground
level ie flat floor. Typi cal heights for 10 tonne
(t) truck at 1200mm & 4t
truck at 900mm. Ware house floor load is usally
1.5t/m2
Clear
Height
above
5m
Raised Dock
Truck Berth Area
Shutter/Over-slider
Cargo Elevator
Dock Shelter
Pallet Elevator
Office
Dock Leveller
Access Ramp
Acess Slope
Logisitics
offices
in
multi-tenanted
facilities
are usually at end of building. Features include raised
floor for cables, minimum
ceiling height of 2.7m,
lighting at 700 lux.
A dock leveller is an adjustable ramp designed
to allow variable truck
sizes access from a raised
warehouse floor. Forklift
ramp allows forklift access to raised dock.
Ramp designed to allow
trucks to access each level
of a logisitics facility.
Can either be one way or
bi-directional in the case
of only one access ramp.
Slope designed to allow
trucks to access multiple levels of a logisitics facility. In a 4 level
warehouse, slope to level
3 with cargo elevators
serving the remainder.
Source: Bear Logi Research
Bear Logi Co.,Ltd
Logistics Property Specialist
11
1.4 Why Japan Logistics Real Estate?
Figure 12: Summary of large scale logistics facilities versus other real
estate in Japan.
Logistics
Residential
Office
Commercial
Land sourcing
Moderately
Difficult
Difficult
Difficult
Increasingly
Difficult
Construction
difficulty
Easy
Difficult
Difficult
Moderately
Difficult
Construction
period
9 to 12 months
12 to 36 months
12 to 36 months
9 to 12 months
Lease up period
Up to 2 years
Up to 1 year
Up to 3 years
Up to 2 years
Lease Term
Fixed lease
between 5 & 20
years
2 year ordinary
lease
2 year ordinary
lease. 5 year
fixed & longer
2-5 years ordinary lease. Fixed
lease between 5
& 15 years
Cap Rate
(Tokyo)
5-6%
4%-4.5%
4.9%-5.3%
3.6%-5.4%
% of Market
Transactions &
Maturity (excl.
land & ‘other’)
8%. Small,
developing/
becoming liquid
25%-30%.
Large, Mature &
Liquid
25%-30%.
Large, Mature &
Liquid
25%-30%.
Large, Mature &
Liquid
Clarity of data
Grey
Clear/Grey
Clear
Clear/Grey
Barriers to
Market Entry
Increasing
Competition
Entrenched
Competition
Entrenched
Competition
Entrenched
Competition
Source: Bear Logi Research
Japan Logistics Real Estate effectively
combines the large industrial capacity
of Japan with an equally important
transportation and consumer market.
Sendai
Sea of Japan
Niigata
Toyama
Matsumoto Utsunomiya
HONSHU
Fukuyama
Fukuoka
Tosu
Saga
Yokohama
Toyota
Chiba
Shizuoka
Okayama
Hiroshima
Kita Kyushu
Kyoto
Tokyo
Kawasaki
Nagoya
Himeji
Saitama
Kobe
Hamamatsu
Pacific Ocean
Osaka
SHIKOKU
Figure 13: Major Japanese Industry and population.
Predominately located on the Pacific Ocean Coastline.
Kumamoto
KYUSHU
35
Periphiral Industrial
Corridor
16
8
2
Million People
Major Sea Port
Major Transport
Corridor
Major Industrial
Corridor
Source: Bear Logi Research
Bear Logi Co.,Ltd
Logistics Property Specialist
13
1.5 Global City Comparisons
Osaka
Tokyo
Logistics Real Estate in Global Cities
This research was carried out to try and
understand the size of the Japanese logistics
real estate market in Tokyo and Osaka
compared to other global cities.
The methodology applied was:
* 3 largest developers in each market
* Facilities located within 50km of the city
* Floorspace greater than 20,000m2 (215,278
sq ft)
Asian logistics development has been robust
especially as global corporations have
comparatively more manufacturing bases there
compared to the USA or EU nations.
It is difficult to investigate all of the applicable
facilities, therefore Bear Logi selected
properties of the top 3 industrial real estate
owners and developers in each city concerned
to understand the local market context and
establish a tool for comparison globally. Some
Bear Logi Co.,Ltd
Large-scale logistics facilities play an
indispensable role in supporting city functions.
Furthermore they have close relations with
land, seaport and airport infrastructure. It is
essential to develop and maintain both of them
for the urban citizen to be serviced comfortably
and efficiently.
Since the advent of containerization the
expansion of warehouse scale has been
progressing globally, large-scale logistics
facilities over 100,000 m2 are these days no
longer remarkable.
The cities investigated included:
* Amsterdam
* Paris
* Seoul
* Los Angeles
* London
* New York
* Hong Kong
* Shanghai
* Osaka
* Tokyo
14
of these real estate developers operated in
multiple markets enabling a good comparison
of their portfolios in multiple cities.
Tokyo has the largest number of facilities within
50 km radius of the city centre and many of
them are integrated either around major port,
airport, or inland suburban Interchange areas.
Due to Tokyo’s expensive land price, the
market has responded by building large multilevel facilities with lift and ramp structures.
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2.2 Fund Investment
leasing process is essential. Therefore many
decide the risk and lead time required is too
great and instead invest via a fund.
However, with more information becoming
available on the logistics sector, developers and
investors should not rule out a direct investment.
Perhaps the development has a sufficiently
different design to other lease facilities
available in the market which may appeal to
tenants willing to pay a higher rent? Due to the
successful growth of the market overall, barriers
to entry are coming down. Local Japanese
developers from other sectors have realized this
and are increasingly entering the market.
Indirect Investment
Indirect investment can be conducted via:
*Private Fund investment,
*Private REIT (Real Estate Investment Trust), or
*J-REIT (Japan Real Estate Investment Trust),
Private Fund investment
The main investors in the Japanese Logistics
sector are typically institutional investors who
are attracted by the long term fundaments and
stability. In order to attract these investors, local
developers and investors establish platforms
into which large equity investments may be
placed which can be then be leveraged up via
local debt facilities. Typically, small transaction
amounts are not accepted.
The market value has no significant fluctuation
due to the low liquidity. Therefore main clients
are composed of pension funds or insurance
companies which look for the long-term
investment. A number of logistics real estate
developers operate private funds.
Private REIT
Private REITs are a relatively new investment
product in Japan with many hitting the market
in 2012. Many are classified as a “Middle
Investment Product” ie between a J-REIT
and a Private Fund. Both private REITs and
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listed REITs share essentially the same legal
characteristics and fundamental framework, but
unlike with a listed REIT, investors are unable to
sell their investment units in the market. Given
the open ended nature, if an investor wants
to exit the Private REIT, then there is potential
liquidity risk if repayment of investment units
is large. This risk may be mitigated by various
measures to control redemptions and thereby
ensure liquidity. Private REITs are also required
to distribute over 90% of their earnings to
investors, and retained earnings are limited.
Private REITs like the name suggests are
privately offered funds and unlike J-REITs
the information is not publicly disclosed often
and in various formats, therefore reducing the
transparency.
There are a number of players with private
REITS in Japan like Mitsubishi Estate Co.,
Mitsui Fudosan Co. and Nomura Real Estate
Holdings Inc. all looking to expand their private
REITs. In 2012 Mitsubishi Corporation started
operating “DREAM”, open-end private REITS
which consists of Commercial, Residential, and
Logistics real estate.
Japan Real Estate Investment Trusts (J-REIT)
Due to the recent successful listings of exclusive
logistics J-REITs, the investment door is now
widely open for individual investors to participate
in the logistics real estate sector. J-REIT is
mainly aimed at the “Retail” investor, because
the process to purchase is no different to buying
other shares.
A large investment amount is not required,
but Japanese REITs are more expensive per
unit or share than Singapore, USA or Australia
which typically trade under $10 per share/
unit. J-REITS focused on logistics trade from
80,000 JPY (approx. 860 USD). Due to the still
limited number of players in the market and high
liquidity characteristics of J-REITs, the market
price can sometimes be volatile.
REITs composed of logistics facilities are
currently under the spotlight and becoming more
popular amongst investors.
Logistics Property Specialist
23
3.3 Development Plans
29,100m2) in Souka-shi and KCRE Yashio
Logistics Center in Yashio-shi (GFA: 18,850 m2).
Both of these facilities have good access to the
Gaikan Expressway.
since Prologis Maihama III was completed in
2010. The facility is located 8km from Osaka
CBD and nearby IC Nakajima Hanshin Bayside
Expressway.
In the Kazo and Kuki areas, located with
excellent access to the Tohoku Expressway,
competition to acquire large-scale logistics sites
is beginning to heat up given the opening of the
Ken-O Expressway.
Kanda Holdings completed construction
of Sakai Logistics Center in 2012 (GFA:
16,500m2) as a consolidated logistics base.
It was developed to connect with the opening
of Sanpo Junction, which joins the Route
5 Bayshore Line. The Sanpo Junction will
drastically improve access to Kyoto, Nagoya or
Tokyo without passing through central Osaka.
Kanda Holdings, a local Japanese logistics
company, will build Kuki Logistics Center (GFA:
33,900m2) in 2013. Ajinomoto Logistics, a group
company of food giant Ajinomoto will construct
their New East Japan Hub Center (GFA:
33,200m2) in 2014.
In August 2012, Orbis a local mail order channel
company, completed its East Japan Distribution
Center (GFA: 11,600m2) in Kazo. In Higashi
Matsuyama area along Kan-Etsu Expressway,
SG Realty will complete multi-tenant type facility
SG Realty Higashi Matsuyama (GFA: 84,000m2)
in 2014. Yaoko, a franchise supermarket
company based in Kanto, will build a new
logistics food center inside of the Higashi
Matsuyama Kuzubukuro Industrial Park in 2014.
In Kawagoe and Tokorozawa area along the
Kan-Etsu Expressway, ORIX Real Estate will
develop two multi-tenant logistics centers.
Tokorozawa Logistics Center (GFA: 72,000m2)
has been purchased by Askul/Yahoo. These
trends of directly purchasing multi-tenant type
facilities may increase in the future. The other
Kawagoe Logistics Center (GFA: 54,900m2) will
be completed in 2013.
Kaneka, a local food company, has completed
Kaneka Foods East Japan Logistics Center in
Kawagoe 2nd Industrial Park in 2012.
Greater Osaka
Osaka
In the Osaka Bay Area, Prologis completed a
large-scale multi-tenant facility Prologis Park
Osaka 4 (GFA: 127,200m2), one of the largest
developments in the central district of Osaka
52
Bear Logi Co.,Ltd
Maruzen Syowa Unyu, a Japanese 3PL that
mainly transports heavy goods and precision
apparatus from customers like Caterpillar or
JFE Steel, will complete their own new Sakai
Warehouse (GFA: 36,300m2) in 2013.
In 2014, a couple of large multi-tenant
developments are being planned in Sakai area
including; Goodman Sakai (GFA: 130,000m2),
and MFLP Sakai (GFA: 133,000m2).
In Hokusetsu area (Takatsuki, Ibaraki, Settsu,
Suita, Toyonaka, Ikeda etc.) Prologis also
completed a "Build to Suit" (BTS) facility
Prologis Park Takatsuki (GFA: 20,900m2) for
DNP Logistics in 2012 as it consolidated two
DNP facilities. The facility was being developed
as subject of the Consolidated Logistics
Efficiency Act (see Chapter 7 about this law).
Mitsubishi Logistics constructed Ibaraki 3rd
Distribution Center in 2012(GFA: 17,700m2)
close to the Ibaraki IC, Meishin Expressway.
The facility is for exclusive for medical usage
and is also recognized as the subject of the
Consolidated Logistics Efficiency Act.
In cooperation with DP Network, the facility
functions as a medical goods distribution center
for West Japan. Mitsubishi Logistics rebuilt their
existing warehouse project “Daito Distribution
Center” nearby Tsurumi IC, Kinki Expressway
for Zojirushi Corporation, a local kitchenware
manufacturing and distribution company.
www.bearlogi.jp
4.2.2 Case Study - Senko
Figure 38: Senko Japan Logistics Property Network
Niigata
Niigata PD Center : 6,140
Toyama
Hokkaido
Toyama PD Center : 12,142
Sapporo PD Center : 13,446
Sapporo No2 PD Center : 15,397
Aeon Hokkaido RDC : 51,765
Kitahiroshima PD Center : 25,294
Ishikawa
Kanazawa PD Center : 15,385
Shiga
Moriyama PD Center : 21,920
Moriyama Warehouse : 5,014
Minakuchi Warehouse : 2,998
Fukui
Fukui PD Center: 18,258
Kyoto
Kyoto Nagaoka Warehouse : 5,780
Kyoto Trunk Room SK : 1,007
Hyogo
Nishikobe PD Center : 44,469
Hanshin Housing Material Center : 13,205
Esaka Logistics Service DC
Nishinomiya Naruohama : 8,772
Gunma
Kitakanto Logistics Center : 36,400
Tochigi
Utsunomiya Distribution Center : 13,282
Okayama
Miyagi
Mizushima Distribution Center : 27,896
Mizushima PD Center : 6,462
Sendai Warehouse : 7,681
Sendai PD Center : 20,297
Aeon Touhoku RDC : 47,850
Hiroshima
Ibaraki
Higashi Hiroshima PD Center : 5,657
Higashi Sales Office : 4,435
Uchimoriya Center Warehouse : 12,552
Ibaraki PD Center : 14,793
Shimane
Saitama
Izumo Center : 3,285
Shin Toda PD Center : 18,986
Minami Saitama Distribution Center : 13,437
Urawa PD Center : 70,516
Sugito PD Center : 58,832
Yamaguchi
Yamaguchi No2 DC : 5,881
Tokyo
Heiwajima PD Center : 26,895
Fukuoka
Fukuoka PD Center : 21,429
Chiba
Kumamoto
Shizuoka
Kumamoto PD Center : 12,225
Hamamatsu PD Center : 16,451
Rinkou PD Center : 16,282
Aichi
Nagoya PD Center : 14,949
Komaki PD Center : 14,899
Ouguchi PD Center : 9,715
Kagawa
Takamatsu DC: 1,556
Osaka
Kagoshima
Kagoshima PD Center : 8,091
Miyazaki
Miyazaki Distribution Centrer : 8,220
Nobeoka PD Center : 10,349
Hyuga PD Center : 24,437
Takeshima Warehouse : 13,886
Noda No1 PD Center : 82,878
Noda No 2 PD Center : 29,805
Maihama PD Center : 29,594
Kashiwa PD Center : 10,340
Funabashi Fashion Logisticss Center : 31,121
Ichikawa Fashion Logisticss Center : 63,107
Matsugashima PD Center : 15,305
Anegasaki PD Center : 9,537
Anegasaki 2 PD Center : 12,288
Kanagawa
Maishima PD Center: 63,900
Higashi Osaka No1 PD Center : 16,530
Higashi Osaka No2 PD Center : 16,769
Neyagawa (No.1, No.2) PD Center : 21,287
Higashi Kadoma Center : 6,657
Daitou Center : 22,367
Rinku Center : 2,718
Nankou PD Center : 8,850
Senboku PD Center : 12,199
Senboku No2 PD Center : 27,674
Senba PD Center : 13,095
Mie
Yokkaichi PD Center : 15,931
Atsugi Logistics Center : 49,852
Atsugi Distribution Center : 17,262
Higashiougishima Distribution Center : 17,952
Higashiogishima PD Center : 12,023
Nara
Nara No1 PD Center : 3,871
Nara No2 PD Center: 9,878
Nara No3 PD Center : 5,918
Koriyama Warehouse : 4,158
Oita
Oita Semi-Manufactured Goods Warehouse: 3,271
Oita Distribution Center : 10,193
Source: Bear Logi Research
62
Bear Logi Co.,Ltd
www.bearlogi.jp
5.1 E-Commerce Market
In the B2C market, there has been a significant
increase in retail trade. In particular the
pharmaceutical, cosmetics, health foods and
supplements sectors have grown by nearly 35
percent over the previous year. (Figure 42)
generated by the e-commerce sector in
Japan, it is not because of a similar increase
in purchasing power, rather it has come at the
expense of traditional strip retail and department
stores.
Whilst many people in the past doubted that
Japanese customers would buy apparel
online, in 2012 the sector had grown by
almost 30% compared to the previous year.
The success is largely based on a number of
apparel shopping mall providers such as Start
Today, an operator of Zozotown.
On review of cargo transportation in Japan, the
cargo amount peaked in 1990 at 6.8 billion tons.
There has been a 26.3% decline over the past
20 years which is a significant drop.
Although people initially had a strong sense of
resistance in purchasing fashion brand goods,
especially luxury brands, the conventional
psychological barrier has gradually been
broken down, especially by younger
consumers. Start Today realized early on
the marketing importance of having in-house
fashion models and studios for effectively
showcasing the vendor goods online.
The Groceries sector has also achieved
strong growth via E-Commerce. Like the
other sectors, consumer habits are changing.
Convenient delivery services for heavy and
hard-to-carry products such as beverages,
rice etc can be delivered easily with one click.
Initially it was just “Net Only” supermarkets but
realizing the opportunity, existing supermarkets
have also tried to expand in the sector as
well as enhance delivery services. With the
inevitable aging of Japanese society these
services will be essential.
Whilst there has been amazing growth
Figure 43: Department Store Sales Transition (19982009) Total Sales
(Billions of Yen)
4000
10000
9000
3500
8000
3000
Sales by segment (Billions of Yen)
7000
2500
6000
2000
5000
Apparel
Food
General
Merchandise
4000
1500
Others
Total
3000
1000
2000
500
1000
0
0
1998
1999
2000
2001
2002
2003
2004
2005
Source: Bear Logi based on data from
Japan Department Stores Association
Bear Logi Co.,Ltd
2006
2007
2008
2009
An aging and declining Japanese population has
become a stark reality with ongoing ramifications
for the economy. Japan is unlikely to change its
immigration policy in the near future and with
continued low birth rates, economic recovery
is continually primed by the government
stimulus. So as the overall pie keeps shrinking;
E-Commerce will continue to absorb a larger
share of freight traffic that is essentially shifted
from other industries.
Among the three retail industries, E-Commerce,
Supermarket and Department Store, total sales
had a 4 percent increase compared 2011. The
supermarkets had a small decline in sales
however they offset a major decline by providing
net sales and increasing home delivery services.
Sales at department stores have continued to
decline year on year with approximately JPY 2.6
trillion wiped in the past 10 years. This is equal
to 26.8% decrease in the market size (figure 43).
Especially hard hit is apparel with a decline of
37% in 10 years.
E-Commerce will continue to grow, but is there
a limit to its growth? The reality for some is they
may struggle to shift from a conventional sales
channel to new on-line one, but for the time
being there is no limit on e-commerce growth.
Benesse, a large Japanese education company,
launched a new women’s’ shopping portal site
specialized in maternity, childbirth, and childcare
in November 2011. The site has over 150 stores
with more than 130 000 goods are available.
Although their conventional and core business is
education which has achieved excellent growth
despite the low birth rate, Benesse intends to
increase the scale of the e-commerce business
up to JPY 20-30 billion in a couple of years.
DeNA, a rapidly growing social game company
from Japan has been strengthening their
Logistics Property Specialist
69
5.2 Case Study - Amazon Japan
72
Bear Logi Co.,Ltd
www.bearlogi.jp
6.1.1 Tokyo Roads
between Misato and Ichikawa Takaya with a
length of 16.0 km will be in service in 2015.
Gaikan is expected to provide a major road
improvement for Ichikawa, Matsudo, Katsushikaku, and Misato-shi areas. The construction of
the northern section of Gaikan has been one of
the main factors that motivated logistics players
to build a series of large-scale logistics real
estate facilities in the area (ie around Misato IC)
Tokyo.The Chuo Kanjo therefore has advantages
for logistics operators as they can access sea
and airport facilities utilizing the Bay Shore
Road (Route B). In the fiscal year 2013, the
remaining south western section of the road is
expected to open, completing the loop road. It is
expected that the completion of this final section
will contribute to reducing traffic congestion,
especially on Inner Circular Routes for vehicles
using the Tomei and Chuo Expressways.
Sasson Expressway
札樽自動車道
京葉道
Central Expressway
央自動車道
Shutou Expressway
路首都高速道
The East Expressway
東自動車道
Kenodo
路圏央道
Hachinohe Expressway
八戸自動車道
Aomori Expressway
青森自動車道
秋田自動車道
Keiyo Road
Chuo Kanjo-sen (Central Circular Route C2)
Chuo Kanjo-sen has a radius of 8 km from
the city center and a total length of 47 km.
Approximately 80% of this road is already in
service and it connects CBD areas such as
Shinjuku, Shibuya and Ikebukuro. The route also
provides convenient access for international
7 8
6 Airport
7 8
passengers using Haneda
or Port of
16
1
s
14
16
k
11 12 13
357 411
1
k
2
k
3
k
4
Shuto kanjo-sen (Inner Circular Route C1)
The Inner Circular Route is the innermost loop
road running around Tokyo CBD and has a
length of approximately 14.8 km. This road was
one of the first to open under the initial plan and
it helped to alleviate congestion.
Second Tomei Expressway
道路第二東名高速
Akita Expressway
Kita Kanto Expressway
路北関東自動車道
Kamaishi Expressway
釜石自動車道
Meishin Expressway
名神高速道
Yamagata Expressway
山形自動車道
磐越自動車道
New Meishin Highway
路新名神高速道
Banetsu Expressway
Nagano Expressway
路長野自動車道
Nihon-kai Tohoku Expressway
日本海東北自動車道
Cross Central Expressway
中部横断自動車道
Tohoku Chuo Expressway
東北中央自動車道
Tokai Hokuriku Expressway
東海北陸自動車道
Joshinetsu Expressway
上信越自動車道
Tokai Ring Expressway
東海環状自動車道
Nagoya Expressway
名古屋高速道
Tomei Expressway Osaka Route
路東名阪自動車道
Higashi Kanto Expressway
東関東自動車道
Ise Bay Expressway
伊勢湾岸自動車道
Tateyama Expressway
館山自動車道
Ise Expressway
伊勢自動車道
Figure 60: Major road network in Tokyo area
首都圏中央連絡自動車（圏央道）
Ｋｅｎ-O Expressway
東北自動車道
Tohoku Expressway
関越自動車道
Kan-Etsu Expressway
Saitama
Prefecture
久喜白岡JCT
Kuki ShiraokaJCT
鶴ヶ島JCT
Tsurugashima
JCT
Yamanashi
Prefecture
柏IC
Kashiwa IC
川口JCT
Kawaguchi JCT
東京外環自動車道
Tokyo Gaikan Expressway
16
東関東自動車道
Higashi Kanto Expressway
三郷JCT
Misato JCT
京葉道路・市川JCT
Keiyo・Ichikawa JCT
京葉道路・宮野木JCT
京葉道路 Keiyo Road
Keiyo・Miyanogi JCT
中央JCT
Chuo JCT
中央自動車道
Chuo Expressway
東京港 Tokyo
Port
16
海老名JCT
Ebina JCT
Section
Date Complete
千葉港
Chiba
Port
千葉東JCT
Chiba Higashi JCT
16
東金IC JCT
Tougane IC JCT
Port
横浜港
Yokohama
Port
TOKYO BAY
Route Name
Section
Chiba
Prefecture
16
横須賀港
Yokosuka
Port
Inner Circular Route
Narita Intl.
Airport
東
To 京
ky 湾ア
o
Ba ク ア
川崎港 y Aq ライ
u
ン
Kawasaki a-Lin
e
東名高速道路
Tomei Expressway
Route Name
成田空港
14
羽田空港
Tokyo Intl.
Airport(Haneda)
Kanagawa
Prefecture
成田JCT
Narita JCT
16
中央環状線
Central Circular Route
大泉JCT
Oizumi JCT
八王子JCT
Hachioji JCT
Ibaraki
Prefecture
つくばJCT
Tsukuba JCT
16
Tokyo
Prefecture
常磐自動車道
Joban Expressway
Date Complete
Route Name
Section
Date Complete
1967. 7. 4
Route 6 (Mukojima Line)
Edobashi JCT～Horikiri JCT
1982. 3. 30
Route 1 (Yokohane Line)
Haneda～Ishikawa-cho JCT
1984. ２. ２
Kosuge JCT～Misato JCT
1985. 1. 24
Route 2 (Mitsuzawa Line)
Kinko JCT～Mitsuzawa
1978. ３. ７
1971. 3. 21
Route 3 (Kariba Line)
Honmoku JCT～Kariba
1990. ３. 20
1989. ９. 27
Central Circular Route
Ohashi JCT～Kasai JCT
2010.3.28
Route 6 (Misato Line)
Route 1(Ueno Line)
Edobashi JCT～Iriya
1969. 5. 31
Route 7 (Komatsugawa Line) Ryogoku JCT～Yagochi
Route 1(Haneda Line)
Hamazakibashi JCT～Haneda
1966. 12. 21
Route 9 (Fukagawa Line)
Hakozaki JCT～Tatsumi JCT
1980. 2. 5
Route 5 (Daikoku Line)
Namamugi JCT～Daikoku JCT
Route 2 (Meguro Line)
Ichinohashi JCT～Togoshi
1967. 9. 30
Route 10 (Harumi Line)
Toyosu～Shinonome JCT
2009. 2. 11
Route 6 (Kawasaki Line)
Kawasaki-Ukishima JCT～Daishi JCT 2010. 10. 20
Route 3 (Shibuya Line)
Tanimachi JCT～Yoga
1971. 12. 21
Route 11(Daiba Line)
Shibaura JCT～Ariake JCT
1993. 8. 26
Kawaguchi Route
Kohoku JCT～Kawaguchi JCT
Route 4 (Shinjuku Line)
Miyakezaka JCT～Takaido
1976. 5. 18
Yaesu Route
Kandabashi JCT～Shiodome JCT
1973. 2. 15
Saitama Shintoshin Route
Yono～Saitama-minuma
2006. 8. 4
Route 5 (Ikebukuro Line)
Takebashi JCT～Bijogi JCT
1993. 10. 26
Bay Shore Route
Namiki~Takaya
2001,10,22
Saitama Omiya Route
Bijogi JCT～Yono
1998. 5. 18
Bay Shore Branch Route
Showajima JCT～Tokai JCT
1983. 2. 24
Bear Logi Co.,Ltd
Logistics Property Specialist
1987. 9. 9
Source: Bear Logi Research
87
6.2.1 Tokyo Airports
東京国際空港
when other Asian airports aggressively
competed and began to dominate Narita.
In 2009 Haneda Airport extended its runway
allowing international airlines to use it further
pressuring Narita. Ibaraki airport, a shared
government and public use facility opened
in 2010 as the third international airport of
the greater Tokyo area. It is located just to
the north of Narita airport and serves mainly
Low Cost Carrier (LCC) Airlines. To counter
this competition Narita Airport opened a new
terminal for LCCs in 2012. It has also opened
a terminal for a business jets “Business
Aviation Terminal Premier Gate”. Despite these
initiatives a negative factor of Narita Airport is
the large distance from the center of Tokyo.
Narita Air cargo
Despite the distance to Tokyo, Narita Airport is
still the most import cargo airport in Japan and
a top 10 global player. In recent years Incheon
and Pudong Airports have leap-frogged Narita
with cargo volumes but if Narita could get its
act together and complete the construction
plan of C runway (3,200 m) it could once again
compete. With the completion of runway B to
2,500 m larger aircraft can now use the facility.
Moreover, the airport arrival and departure flight
capacity also increased to 220,000 flights a
year since March, 2010. Narita is surrounded
by relatively cheap land and ample logistics
facilities both on and off tarmac. In 2008 the 7th
cargo building was completed with total Airport
throughput capacity at 2,450,000 tons. Cargo
has been steadily increasing at Narita but
began to drop in 2007 and was again impacted
negatively by the 2011 earthquake and tsunami.
Around Narita Airport there are a number of
‘bonded’ warehouses. A bonded warehouse is
an area in which dutiable goods may be stored,
sorted and partly modified without payment of
customs duty. Given the importance of bonded
areas in the supply chain it is no surprise to find
many logistics facilities around Narita airport.
The tenants are typically air-forwarders and
import/exporters. As of October, 2012 there
were 38 companies operating out of 42 bonded
storage locations at Narita Airport (figure 67).
The total warehouse area for bonded facilities
outside the Narita terminal ‘off tarmac’ was
206,500 m2 (figure 68) which is roughly twice
as much floor space as inside the terminal ‘on
tarmac’.
Bear Logi Co.,Ltd
Tokyo International Airport (Haneda)
【空港概況】
・種別
・設置管理者
・位置
・面積
・滑走路（長さ×幅）
「写真提供：羽田再拡張Ｄ滑走路ＪＶ」
：拠点空港（国管理空港）
：国土交通大臣
：東京都大田区
：1,522ha
：（Ａ）3,000ｍ×60ｍ
：（Ｂ）2,500ｍ×60ｍ
：（Ｃ）3,000ｍ×60ｍ
：（Ｄ）2,500ｍ×60ｍ
：24時間 (24時間)
Tokyo International Airport (Haneda)
Haneda Airport is located in Ota-ku about
・運用時間（利用時間）
14km
south of Tokyo. Haneda is Tokyo’s
【沿革】
main
domestic
airport linking with 47 other
・昭和 ６年 東京飛行場が立川から移転
・昭和２０年 米軍による接収
Japanese
airports.
Recently it began to service
・昭和２７年 米軍から返還「東京国際空港」と改称
・昭和６３年 Ａ滑走路供用開始（3,000m×60m）
international
airlines and a network has been
・平成 ５年 第一旅客ターミナルビル供用開始
・平成 ９年 Ｃ滑走路供用開始（3,000m×60m）
formed
with
15
overseas cities. Haneda has
・平成１０年 旧国際線旅客ターミナルビル供用開始
Ｂ滑走路供用開始（2,500m×60m）
the・平成１２年
most
passenger
traffic in Japan with
・平成１６年 第２旅客ターミナルビル供用開始
・平成２２年 Ｄ滑走路（2,500m×60m）及び国際線旅客ターミナル供用開始
approximately
64 million people per year using
it in 2010 which ranks it as the 5th busiest
airport in the world.
Haneda Airport was opened in 1931 as a
private sector airport. Since this time Haneda
was the main Tokyo Airport for both domestic
and international flights. With the opening
of Narita airport in 1978, most international
flights were transferred from Haneda. However
in the 2000s with Japan's economy growing
sluggishly and Asian neighbor’s growing rapidly
there was a need to re-internationalize Haneda
Airport, especially given its convenient access
to the center of Tokyo.
It was decided to increase Haneda’s capacity
by expanding it offshore thereby reducing
noise impacts and allowing 24 hour operation.
Haenda has 4 runways (2 x 2,500 m with and
2 x 3,000m) allowing simultaneous taking off
and landing. In 2010, the 4th runway (D) was
completed and in 2012, the international airline
area was expanded. Runway C is planned to
be extended.
Haneda Air Cargo
Haneda airports annual freight transaction
volume is about 820,000 tons which makes
Logistics Property Specialist
95
7.1 Zoning and Land Use
Figure 81: Japan Zoning, Land Use and Fire Protection Controls
Urbanization Promotion Area
District Plan
Is already Urbanized & development is promoted
Other Zonings
Urbanization Control Area
Fire Prevention & FAR Bonus
Urbanization should be controlled. Effectively a zoned area.
See below as Residential, Commercial & Industrial
Land Use Zone (UPA)
Land Use Zoning
Urbanization Promotion Area
Controls the volume, use- and height of buildings
Urbanization Control Area
Logistics Real Estate Permissable
City Planning Area
Permissable in the 6 zones in blue
R e s ide n tia l
C la ss I L ow -R is e R e s ide n tia l
Max. Floor Area Ratios (%)
Max. Building
CoverRatios (%)
50, 60, 80, 100, 150, 200
30, 40, 50, 60
50, 60, 80, 100, 150, 200
30, 40, 50, 60
100, 150, 200, 300, 400, 500
30, 40, 50, 60
100, 150, 200, 300, 400, 500
30, 40, 50, 60
D istrict only for lo w-rise residential build ings
C la ss II L ow -R ise R e s ide n tia l
D istrict m ainly for low-rise residential build ings
C la ss I M id & H ig h-Rise
R e s ide n tia l
D istrict only for m id & high-rise buildings
C la ss II M id & H ig h-Rise
R e s ide n tia l
D istrict only for m id & high-rise buildings
C la ss I R e sid en tial
100, 150, 200, 300, 400, 500
50, 60, 80
100, 150, 200, 300, 400, 500
50, 60, 80
100, 150, 200, 300, 400, 500
50, 60, 80
100, 150, 200, 300, 400, 500
60, 80
D istrict to protect residential environm ent
C la ss II R esid e ntia l
D istrict to protect residential environm ent
S e m i R e sid e ntial
D istrict alongside high w ays providing an a ppropriate tra nsition
between adjacent reside ntial districts and road w ays
C o m m e rc ia l
N e ig h b orh o o d C om m e rc ial
D istrict w here local residents bu y daily commodities
C o m m e rc ia l
200, 300, 400, 500
1,300
80
100, 150, 200, 300, 400, 500
50, 60, 80
100, 150, 200, 300, 400
50, 60
100, 150, 200, 300, 400
30, 40, 50, 60
D istrict for bank s, theaters, bars & restaurants,departm ent stores etc.
S e m i Ind u strial
In d us trial
D istrict for light m anufacturing & service facilities
In d us trial
D istrict for various types of m anufacturing facilities
In d us trial U s e O n ly
D istrict only for industrial m anufacturing facilities
Building Size
Zoning
Fire Protection
District
Source: Bear Logi Research
Bear Logi Co.,Ltd
Semi-Fire
Protection
District
Required Construction
3 stories or more
Fire resitive building
More than 100m2 floor area
Fire resitive building
Other than the above
Fire resitive building/Quasi fire resistive
4 stories or more
More than 1,500m2 floor area
Fire resitive building
Fire resitive building
More than 500m2; less than 1,500m2 floor area
Fire resitive building/Quasi fire resistive
3 stories
Fire resitive building/Quasi fire resistive
or specified wood building
Logistics Property Specialist
109
7.4.2 Construction Prices
Despite the demand generated from the
reconstruction efforts of the Great East
Japan Earthquake on March 2011, Japanese
construction prices have remained historically
weak. Bear Logi anticipates the effect of the
reconstruction effort and the weakening Yen to
lead to material price increases in 2013.
The impact of the potential sales tax increase
brought forward construction starts of apartment
dwellings by the previous government and now
with the massive stimulus package which is
predominately construction related, we predict
builders will be even pickier about which jobs
that they choose to discount on.
In contrast to material prices that currently
remain low, Japanese general contractors
in the last 12 months have increased overall
quoted construction prices for logistics and other
properties. The sector has been operating on
very tight profit margins for many years due to
the deflationary environment and this has now
forced consolidation in the industry. In addition
the aging talent pool means contractors are
struggling to attract and retain the best workers,
with sub-contractors now increasing their charge
out rates.
The high yen has insulated the price of
construction materials over the last few years.
As the Bank of Japan has agreed in effect to set
a 2% inflation goal in line with the newly elected
government’s policy, the construction sector is
a major and direct beneficiary of the stimulus
package. Bear Logi forecasts price rises of up to
5% year on year for at least for the next 2 years.
Figure 97: Oil Price & Yen Rate (prior to Yen weakening)
Oil Price
& Yen rate
Yen / ＄
140
120
100
80
60
40
20
0
2009
2008
2007
2011
2010
2012
Figure 98: Japan Logisitcs Facility typical build cost
Year
2010
2011
2012
2013
2014
Cost
per
Tsubo
JPY
¥210,000
¥220,000
¥230,000
¥240,000
¥250,000
Cost
per m2
JPY
¥63,521
¥66,546
¥69,570
¥72,595
¥75,620
Cost
per m2
USD
$680
$713
$745
$777
$810
Cost
per Sq
ft USD
$7,323
$7,672
$8,020
$8,369
$8,718
Source: Bear Logi Research
Source: Bear Logi Research
Figure 99: Japanese
Building
MaterialMaterial
Costs Costs
Japanese
Building
yen
Steel
140,000
yen/ t
H shape iron
yen/t
120,000
Concret yen/m2
100,000
Steel Scrap yen/t
80,000
60,000
40,000
20,000
0
20０8
20０9
2010
2011
2012
Source: Bear Logi Research. Based on "Daily Steel newspaper", "Concrete Association"
Notes : 1)Concret is FC30 S18
2)Steel is SD295-D19
Bear Logi Co.,Ltd
Logistics Property Specialist
129
9.2 Rents - Tokyo
In the Joto area (Edogawa, Katsushika,
Arakawa, Adachi, Taito, Sumida-ku) and
Johoku area (Suginami, Kita, Itabashi, Nerimaku) in Tokyo there is little supply of new large
scale warehouses for the lease market. Most
of the existing stock is generally smaller and
older. Some of the former warehouses are
being redeveloped for housing or commercial
uses. However as the office rents are not
substantially higher, some warehouses have
been renovated in recent years for adaptive
re-use. This has seen rent levels increase for
suitably designed and marketed properties.
Rents - Tokyo
As we have previously mentioned, one of the
prime and most expensive areas in Japanese
logistics real estate market is around Koto-ku,
in the bay area not far from Tokyo CBD. This
area is largely reclaimed land dating back to
the Edo or Tokugawa period (between 1603
and 1868). The area was a focus of trade and
handled both inbound and outbound cargo with
the area characterized by bridges and canals.
In recent years residential and commercial
facilities are rapidly encroaching on the
waterfront area that was once only known for
its warehouses and factories. Whilst incursion
of other land uses remains a threat to the
area as a logistics precinct, there is sufficient
redevelopment of logistics facilities occurring
due to the high rents, excellent transport and
proximity to a large population catchment.
Nakano Syokai Tatsumi Center completed in
February 2012 has a GFA: 31,500 m2. The
project is a Joint Venture Project of Mitsubishi
Estate and Mitsui & Co. Ltd which is master
leased by Nakano Syokai. The property was
sold to IIF in September 2012.
There is less and less suitably zoned large
scale land parcels for logistics available along
National Route 16, which plays significant
role in supplementing the ring road function
in the Greater Tokyo Metropolitan Area. Along
with construction of north Gaikan Expressway
and Ken-O Expressway, development trends
are moving inland in the vicinity of newly
opening inter-changes. For example, a series
of developments have been completed in Kuki
and Kazo along Tohoku Expressway in the
past couple of years.
Figure 114: Greater Tokyo Rents Map (read with Figure 115)
常磐自動車道
Joban Expressway
東北自動車道
Tohoku Expressway
26
関越自動車道
Kan-Etsu Expressway
Saitama
Prefecture
28
27
16
23
24
16
Tokyo
Prefecture
Yamanashi
Prefecture
7
25
5
Kanagawa
Prefecture
16
22
東関東自動車道
Higashi Kanto Expressway
4
東名高速道路
Tomei Expressway
1
11
10
9
Narita Intl.
Airport
14
京葉道路 Keiyo Road
14
15
2
東京港 Tokyo
Port
羽田空港
Tokyo Intl.
Airport(Haneda)
17
千葉港
Chiba
Port
16
東
To 京
ky 湾ア
o
Ba ク ア
川崎港 y Aq ライ
u
ン
Kawasaki a-Lin
e
Port
横浜港
Yokohama
Port
TOKYO BAY
横須賀港
Yokosuka
Port
Bear Logi Co.,Ltd
成田空港
3
16
13
18
16
中央環状線
Central Circular Route
6
8
中央自動車道
Chuo Expressway
21
東京外環自動車道 20
19Tokyo
Gaikan Expressway
12
146
Ibaraki
Prefecture
首都圏中央連絡自動車（圏央道）
Ｋｅｎ-O Expressway
www.bearlogi.jp
16
Chiba
Prefecture
Appendix 1 - Developments
【Other development plan】
64　Ajinomoto Logistics New East Japan LC
Name: New East Japan
Logistics Center
Location: Kuki city, Saitama
GFA: approx 33,170 ㎡
Completion: Apr 2014
65　Nippon Express Baraki International logistics NO. 2 (Image)
Name: Baraki International
Logistics NO. 2
Location: Ichikawa-shi,
Chiba
GFA: approx 36,500 ㎡
Completion: Early 2014
67　Heiwamirai Fujieda LC
66 Hanyu Archive Center NO.2
Name: Fujieda Logistics Center
Location: Fujieda-shi, Shizuoka
Site area: 10,794.70 ㎡
GFA: 11,535.91 ㎡
Start: Aug 2011
Completed: Mar 2012
Name: Sumitoko Warehouse
Tokyo branch,
Hanyu archive center NO.2
Location: Hanyu city, Saitama
Site area: 34,014 ㎡
GFA: 24,380 ㎡
Start: Feb 2011
Completed: Jan 2012
68　Alfresa Aichi logistics center Name: Aichi Logistics Center
Location: Ichinomiya-shi, Aichi
Site area: 35,159.10 ㎡
GFA: 32,892.90 ㎡
Completed: Mar 2012
70 Orbis East Japan LC
69　NTT logisco Yao logistics center
71　Mediceo South Tokyo ALC
Name: East Japan
Logistics Center
Location: Kazo city, Saitama
GFA: 11,570 ㎡
Completed: Aug 2012
Name: South Tokyo ALC
Location: Kawasaki-shi,
Kanagawa
Site area: 8,847 ㎡
GFA: 21,767 ㎡
Completed: Aug 2012
72　Vantec Kyushu Shiraishi LC Building D
Name: Shiraishi
Logistics Center Building D
Location: Miyako-gun,
Fukuoka
Site area: 19,493 ㎡
GFA: 21,771.90 ㎡
Completed: Aug 2012
73　Kaneka Food East Japan LC
74　Kokubu Fujisawa LC
75　Nippon Access Shizuoka branch
Name: East Japan Logistics
Center
Location: Kawagoe city,
Saitama
Site area: approx 20,000 ㎡
GFA: approx 20,000 ㎡
Completed: Sep 2012
Name: Shizuoka branch
Location: Shizuoka-shi,
Shizuoka
Site area: 9,711.35 ㎡
GFA: 13,686.11 ㎡
Completed: Sep 2012
Name: Kokubu Fujisawa
Logistics Center
Location: Fujisawa-shi,
Kanagawa
GFA: 20,282 ㎡
Completed: Sep 2012
160
Name: Yao Logistics Center
New Building A
Location: Yao-shi, Osaka
Site area: 15,324.79 ㎡
GFA: approx 15,300 ㎡
Completed: Aug 2012
Bear Logi Co.,Ltd
www.bearlogi.jp
Appendix 6 - Due Diligence Checklist
(e)
(f)
Are there any Maintenance manuals, reports, logs
available (including the documents from legally required
inspections) ?
Has the Jyuyo-jikou-setsumei-syo (Jyusetsu) been
obtained? Does it disclose any material issues about
the property?
(g)
When was the property inspected and was it with the
property manager / facility manager
(h)
Have hazardous materials such as PCB and asbestos
been used? Are there any oils or chemicals used. If so,
what action will be (was) taken?
10.
(a)
Confirm the occupancy by referring to the monthly
report and the rent roll, and create a list that includes
the rent, the security deposit, etc.
(b)
Do we have the lease as well as memos and other
letters exchanged later?
(c)
Are there any subleases on the Property? Is so, are
the Subleasing Agreements available?
(d)
Are any rent reviews overdue?
(e)
Do all the actual conditions including the rent
correspond to the conditions specified in the lease?
(f)
Does the Lease Contract have provisions on any
specific redemptive conditions or the first refusal
right?
(g)
Is the tenant in breach of any provision of the lease?
(h)
Is the owner in breach of any provision of the lease?
(i)
Are there any special make good provisions？
(i)
Inspect building exterior, roof and guttering – any
defects? Are there any building leaks?
(j)
Inspect building interior any damage, cracks delamination
etc. Does the building have any mould anywhere?
(k)
Identify any problems with expected durability of external
building fabric.
(l)
Description on heating and ventilation
(m)
Electrical, Hydraulics,
specification
slab
(j)
Check details of any security deposits, and creat a
list of the components.
(n)
Fire protection – details of fire safety systems –
sprinklers, smoke detection, extinguishers. Are the
relevant approvals in place?
(k)
Is there a free rent period? If so, have we confirmed
its length yet?
(o)
Review: As built drawings, Structural drawings and
calculations, Geotechnical, Façade Testing, Construction
quality control reports, Building condition and issue
reports, Inspect tenant’s fitouts for compliance with
statutory requirements. Does the exterior infrastructure
to the site capable allow further development? Electricity,
roads etc.
(l)
Is the tenant in arrears of rent? Did we confirm what
action the current owner took or is going to take?
(m)
Note if any leases have not signed.
(n)
Are all leases valid and enforceable?
(o)
Are there any references to rights of first refusal
within the leases which have been identified?
(p)
Have any tenants exercised their option to renew
under the lease?
(q)
If copy of the Lease has not been obtained, have you
done the arrangement to get one? Have the Owner’s
tenancy files been reviewed? Request access to the
Owner’s tenancy files.
(p)
Lifts,
Security,
Floor
Reports to include identification of significant
maintenance, functional or design issues and associated
costs of rectification. Quality of installation, simplicity in
servicing, years of operation and future life expectancy.
8.
Infrastructure Location
(a)
Have we obtained a document that describes the
connections to sources of power supply?
(r)
Are new leases, assignments, sub-lettings or
terminations being contemplated?
(b)
Have we obtained a document that describes the
connections to potable water and sewage?
(s)
What communications exist with the tenant(s)?
(t)
Are there any disputes or conflicts with the tenant(s)?
(c)
Have we obtained a document that is relevant to the
telephone line?
(u)
Any car parking, signage, contract issues? Is there
anything that we should request the Vendor to do?
(d)
Have we obtained a document that is relevant to gas?
(v)
Has a credit check been conducted on the tenant?
9.
Building Maintenance
(a)
Are there any building agreements in place for the
Property?
11.
Outgoings
(a)
(b)
Have these agreements been reviewed?
Do we have a good understanding of all the property
outgoings? Create a list.
(c)
Obtain or prepare schedule of all existing agreements
(1)
(d)
Are there any defaults under these agreements?
Do we have the documents that are related to fixed
asset tax? Is there any chance for the tax rate to be
changed in the future?
(e)
Are there any parts of the property which will be
added later to be serviced in the building maintenance
agreement?
(2)
Have we collected the information about depreciated
asset tax?
(f)
Are there any warranties which should be assigned
under these service agreements?
(3)
Do we have a good understanding of the building
maintenance and administrative outgoings?
(g)
Are there service records?
(4)
Is there any major repair work being scheduled? If
so, have we obtained the quotation for the cost?
(h)
Review records and list the existing problems.
(5)
(i)
Will any of the service agreements expire prior to
purchasing the Property? If so, take necessary action.
Have we confirmed the custodian fee? If so, is the
confirmed fee at the right level?
(b)
Is there any unpaid taxes or taxes that are in arrears?
(c)
Are there any other outstanding payments?
(d)
Have they been audited？
(e)
Has any research been done to identify the road side
land values, the official land price, the standard land
price, etc.? Create a list.
Bear Logi Co.,Ltd
Logistics Property Specialist
167
JaPan Logistics real
estate Handbook - 2013
Bear Logi Co.,Ltd is a Logistics Property Consultant based in Tokyo.
Bear Logi Co.,Ltd.
Step Roppongi Building, West 1F 6-8-10 Roppongi, Minato-ku, Tokyo 106-0032, Japan
E-mail: matthew.zann@bearlogi.jp TEL:+81-3-5411-8336 FAX:+81-3-5411-7485
Web: www.bearlogi.jp