It was around 2006, when I was talking with my supervisor, an English guy, about the retail property investment, he said “Yuko, shopping is a leisure….Thus we can expect strong demand for retail spaces. ” Actually I didn’t really agree with him as in Japan, I had not been buying my personal goods through so-called face-to-face sales. I had rarely been to shopping malls and enjoyed shopping. In Japan, the commencement of e-commerce was quite early stage in that sense. The trend has been so distinct now in 2020. E-commerce penetration ratio is over 6 percent in 2018 and its market size would be around 25 trillion in 2023.
Generally speaking, on the other hand, investment towards logistic market has been moderately growing and compared with other sectors like offices and residentials, rather high yield we can expect. While the office yield has been compressed to 2.5 percent now a days, logistic yield has been around 4.5 percent. Please keep in mind that you can expect the favorable financial condition like around 70 percent of LTV and 1-2 percent of interest. This structure would secure you about more than two digits return. Under development stage, you would be able to realize much higher return.
Therefore, one of our principle investment strategies is allocating some portion to this sector, industrial and logistics, including development. For further details, please contact us. ytomizuka@abrilsjp.com
