Logistics And Healthcare Transactions Reach New Highs In Japan In 2019

February 14, 2020 — The transaction volumes for logistics facilities in Japan hit 891.9 billion yen (US$8 billion) in 2019, the largest for the sector since 2002 when the Nikkei Real Estate Market Report started its real estate survey. Separately, deal volumes for the health care sector also reached a record high at 101.6 billion yen (US$910 million). 

Based on the report, deal volumes for the logistics sector accounted for about 24% of the total transactions for the year of 3.6 trillion yen. The total number of transactions across all sectors in 2019 was 1,665, rising 4% from 2018’s level. 

Data for the last decade showed that the logistics sector has gained a more significant share of the total transaction volumes at the expense of the office sector. In 2010, 41% of all transactions were concentrated in the office sector and only 4% in logistics. Nine years later, the office sector’s share has fallen to 31% while the logistics’ portion has climbed to 24%. 

Also, the sector accounted for nine of the 35 biggest real estate transactions worth about 20 billion yen in 2019. In July last year, Blackstone acquired a logistics portfolio of six properties worth more than 100 billion yen from Mapletree Investments in Singapore. This transaction was the biggest logistics deal and ranked third overall.

The year also saw active logistics listings. Sosila Logistics REIT, Escon Japan REIT and Sankei Real Estate REIT had their initial public offerings (IPO) during the year.

The healthcare sector had also been busy. The most notable healthcare transactions in 2019 included Nippon Healthcare REIT’s acquisition of 28 properties from Daiwa Securities Group for approximately 62.7 billion yen. Nippon Healthcare will merge with Japan Rental Housing Investments in April 2020.

Healthcare & Medical REIT acquired Ship Senri Building in Toyonaka City, Osaka Prefecture, from Sumitomo Mitsui Finance and Leasing, one of its sponsors. It is a mixed-use facility with a gross floor area of 24,813 square meters. The property comprised a hospital and a nursing home for the elderly. It was transacted at the highest price for a healthcare facility at 12.92 billion yen The appraised cap rate was 5.3%.