The report considers the value of city warehouses as a means of facilitating the growth of logistics services in urban areas and examines the current situation in the Greater Tokyo area.

Rising demand for logistics services in Japan, coupled with the shortage of transportation manpower, is making it challenging to sustain shipping services. This is increasingly being referred to as the “Logistics Crisis”, which combined with a rise in transportation fees, is affecting many sectors.

One possible solution to this challenge is to establish intermediate bases in areas close to delivery destinations. While these intermediate sites would need to be located in urban areas, operational requirements could be met in a small floor area. CBRE refers to this type of warehouse as a “city warehouse”, and foresees that demand for city warehouses will grow in future.

Our analysis of tenant requirements in the Greater Tokyo area shows high demand for small-scale warehouses in Central Tokyo but they are in short supply. As well as Central Tokyo, CBRE expects to see solid demand for city warehouses in hub cities throughout Japan.

As improving the overall efficiency of delivery services is a pressing issue for the logistics sector, city warehouses are set to gain popularity as a potential solution, and may also offer new investment opportunities.