Logistics real estate platform ESR has purchased a plot in the Greater Tokyo area and plans to invest more than US$1bn to develop it into one of the biggest logistics parks in Japan.
The initial phase of the ESR Yokohama Distribution Centre will feature two modern, four-storey logistics warehouses totalling 393,226 sq.m. in gross floor area, the buyer said in an announcement.
The site is located on Tokyo Bay in the southern part of Yokohama, a city in the Kanagawa Prefecture — some 45km from the Tokyo CBD. “Low vacancy and continued strong demand coupled with the constrained supply of premium space around Tokyo Bay makes this Yokohama site a rare opportunity,” ESR co-CEO Stuart Gibson and ESR president Charles de Portes said together in a statement.
The project is backed by ESR’s Redwood Japan Logistics Fund 2, Equity International (EI) and a major US pension fund.
EI has a long history with ESR and its founders, especially in Japan, noted EI CEO Tom Heneghan.
“The company has been a proven pioneer in developing modern logistics facilities in the country for more than a decade,” he said.
The newly-acquired plot is also only 15km from Yokohama Port; 30km away from Haneda International Airport; and about 40km from the Port of Tokyo container terminal.
The site is also close to a new highway connecting the Ken-O and Tomei expressways that is set to open next year.
The new logistics park comes at an ideal time for tenants, who are facing a severe shortage of high-quality rental warehouse space in the Greater Tokyo Bay area.
The vacancy rate of logistics warehouses in the Tokyo Bay area stood at 2.4% at the end of 2018, according to advisor CBRE.
ESR has more than US$14bn worth of assets under management and its platform spans mainland China, Japan, South Korea, Singapore, Australia and India.