Logistics Real Estate HandbooK - 2013 - Bear Logi

Logistics Real Estate

HandbooK - 2013

ii Bear Logi Co.,Ltd www.bearlogi.jp

Forward iTable of Contents ii

Chapter 1 Introduction to Japan Logistics Real Estate1.1 Japan Outlook 11.2 Japan Real Estate Market 61.3 Definition of Modern Japanese Logistics Facility 91.4 Why Japan Logistics Real Estate? 121.5 Global City Comparisions: Logistics Real Estate 141.6 Is Japan logistics real estate going to reach saturation point? 18

Chapter 2 Logistics Real Estate Investment in Japan2.1 Investment Methodology 222.2 Fund Investment 232.3 J-REIT Market 242.4 Securitization 272.5 Due Diligence 302.6 Mergers & Acquistions (M&A) 38

Chapter 3 Japanese Logistics Real Estate Players3.1 Market Players 403.2 Transactions & Cap Rates 473.3 Development Plans 49

Chapter 4 Third-party Logistics (3PLs) 4.1 Global 3PLs 554.2 Japanese 3PLs 574.2.1 Case Study - DHL 594.2.2 Case Study - Senko 614.3.3 Case Study - Nippon Express 64

Chapter 5 E-Commerce in Japan 5.1 E-Commerce Market 675.2 Case Study - Amazon Japan 715.3 Case Study - Rakuten 755.4 Case Study - Yahoo・Askul 79

Chapter 6 Infrastructure 6.1 Japan Roads 826.1.1 Tokyo Roads 866.1.2 Osaka Roads 886.1.3 Nagoya Roads 906.2 Japan Airports 926.2.1 Tokyo Airports 956.2.2 Osaka Airports 976.2.3 Nagoya Airports 996.3 Japan Ports 1006.3.1 Tokyo Ports 1026.3.2 Osaka Ports 1046.3.3 Nagoya Ports 1056.4 Customs and Port Union 106

Chapter 7 Developing Japanese Logisitcis Real Estate7.1 Zoning and Land Use 1087.2 Contracts 1127.3 Japan Land Prices 1147.4 Construction Process 1217.4.1 Warehouse History & Trends 1257.4.2 Construction Prices 129

Chapter 8 Supply, Demand & Absorbtion 8.1 Supply - Japan 1308.1.1 Supply - Tokyo 1358.1.2 Supply - Osaka 1368.1.3 Supply - Nagoya & others 1378.2 Demand & Absorption 138

Chapter 9 Rents 9.1 Rents - Overview 1449.2 Rents - Tokyo 1469.3 Rents - Osaka 1499.4 Rents - Nagoya 1519.5 Rents - Other 152

Appendix 153Glossary of terms 170

Table of Contents

2 Bear Logi Co.,Ltd 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 stimu-lus 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 spend-ing 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

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. There-fore, 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.

11 Bear Logi Co.,Ltd Logistics Property Specialist

1.3 Description of Modern Japanese Logistics Facility

A dock leveller is an ad-justable ramp designed

kcurt elbairav wolla otsizes access from a raised warehouse floor. Forklift ramp allows forklift ac-cess to raised dock.

Dock Leveller

Single sided berthA 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 en-ter center road from both sides simultaneously.

Center berthA 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 “shal-

ro elgnis eb yaM .“woldouble sided “cross dock”.

Japanese logistics facil-ities are usually multi-storey 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/shut-ters for every 1,500m2 .

Height & ColumnsA 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

Dock and Floor

Ramp designed to allow trucks to access each levelof a logisitics facility. Can either be one way or bi-directional in the case of only one access ramp.

Access RampSlope designed to allow trucks to access multi-ple levels of a logisit-ics facility. In a 4 level warehouse, slope to level 3 with cargo elevators serving the remainder.

Acess SlopeLogisitics offices in multi-tenanted facilities are usually at end of build-ing. Features include raised floor for cables, minimum ceiling height of 2.7m, lighting at 700 lux.

Office

Raised Dock Clear Height above 5m

Column width more than 8m Truck Berth Area

Center Berth & access ‘Shallow’

Side Berth

Shutter/Over-slider

Dock Shelter

Cargo Elevator

Pallet Elevator

Fire shutter & walls

Figure 11: Description of Modern Japanese Multi-Level Logistics Facility

Source: Bear Logi Research


HONSHU

KYUSHU

SHIKOKU

NagoyaTokyo

Osaka

Kyoto

Kobe

Himeji

Hiroshima

OkayamaFukuyama

Kita KyushuFukuoka

Tosu

Kumamoto

Saga

Hamamatsu

ShizuokaToyota

Yokohama

Kawasaki

Chiba

Saitama

Toyama

Niigata

Sendai

Matsumoto Utsunomiya


35

1682

Million People Major Sea Port Major TransportCorridor

Major IndustrialCorridor

Periphiral IndustrialCorridor

Pacific Ocean

Sea of Japan

Japan Logistics Real Estate effectively combines the large industrial capacity of Japan with an equally important transportation and consumer market.

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 ordi-nary 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



Figure 12: Summary of large scale logistics facilities versus other real estate in Japan.


Figure 13: Major Japanese Industry and population.Predominately located on the Pacific Ocean Coastline.

1.4 Why Japan Logistics Real Estate?


OsakaTokyo

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)

The cities investigated included: * Amsterdam* Paris* Seoul* Los Angeles* London* New York* Hong Kong* Shanghai* Osaka* Tokyo

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

of these real estate developers operated in multiple markets enabling a good comparison of their portfolios in multiple cities.

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.

Asian logistics development has been robust especially as global corporations have comparatively more manufacturing bases there compared to the USA or EU nations.

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 multi-level facilities with lift and ramp structures.

1.5 Global City Comparisons


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

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.


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.

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, 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

OsakaIn 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

since Prologis Maihama III was completed in 2010. The facility is located 8km from Osaka CBD and nearby IC Nakajima Hanshin Bayside 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.

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.


Sapporo PD Center : 13,446Sapporo No2 PD Center : 15,397Aeon Hokkaido RDC : 51,765Kitahiroshima PD Center : 25,294

Sendai Warehouse : 7,681Sendai PD Center : 20,297Aeon Touhoku RDC : 47,850

Nagoya PD Center : 14,949Komaki PD Center : 14,899Ouguchi PD Center : 9,715

Yokkaichi PD Center : 15,931

Mizushima Distribution Center : 27,896Mizushima PD Center : 6,462

Higashi Hiroshima PD Center : 5,657Higashi Sales Office : 4,435

Yamaguchi No2 DC : 5,881

Izumo Center : 3,285

Takamatsu DC: 1,556

Uchimoriya Center Warehouse : 12,552Ibaraki PD Center : 14,793

Utsunomiya Distribution Center : 13,282

Kitakanto Logistics Center : 36,400

Shin Toda PD Center : 18,986Minami Saitama Distribution Center : 13,437Urawa PD Center : 70,516Sugito PD Center : 58,832

Noda No1 PD Center : 82,878Noda No 2 PD Center : 29,805Maihama PD Center : 29,594Kashiwa PD Center : 10,340Funabashi Fashion Logisticss Center : 31,121Ichikawa Fashion Logisticss Center : 63,107

Heiwajima PD Center : 26,895

Atsugi Logistics Center : 49,852Atsugi Distribution Center : 17,262Higashiougishima Distribution Center : 17,952

Hamamatsu PD Center : 16,451Rinkou PD Center : 16,282

Niigata PD Center : 6,140

Toyama PD Center : 12,142

Kanazawa PD Center : 15,385

Fukui PD Center: 18,258

Moriyama PD Center : 21,920Moriyama Warehouse : 5,014Minakuchi Warehouse : 2,998

Kyoto Nagaoka Warehouse : 5,780 Kyoto Trunk Room SK : 1,007

Maishima PD Center: 63,900Higashi Osaka No1 PD Center : 16,530Higashi Osaka No2 PD Center : 16,769Neyagawa (No.1, No.2) PD Center : 21,287Higashi Kadoma Center : 6,657Daitou Center : 22,367Rinku Center : 2,718Nankou PD Center : 8,850Senboku PD Center : 12,199Senboku No2 PD Center : 27,674Senba PD Center : 13,095

Nishikobe PD Center : 44,469Hanshin Housing Material Center : 13,205Esaka Logistics Service DC

Nishinomiya Naruohama : 8,772

Nara No1 PD Center : 3,871Nara No2 PD Center: 9,878Nara No3 PD Center : 5,918Koriyama Warehouse : 4,158

Fukuoka PD Center : 21,429

Kumamoto PD Center : 12,225

Oita Semi-Manufactured Goods Warehouse: 3,271 Oita Distribution Center : 10,193

Miyazaki Distribution Centrer : 8,220Nobeoka PD Center : 10,349Hyuga PD Center : 24,437Takeshima Warehouse : 13,886

Kagoshima PD Center : 8,091

Matsugashima PD Center : 15,305Anegasaki PD Center : 9,537Anegasaki 2 PD Center : 12,288

Higashiogishima PD Center : 12,023

Hokkaido

Kyoto

Osaka

Hyogo

Nara

Fukuoka

Kumamoto

Oita

Miyazaki

Kagoshima

Niigata

Toyama

Ishikawa

Fukui

Shiga

Miyagi

Aichi

Mie

Okayama

Hiroshima

Yamaguchi

Shimane

Kagawa

Ibaraki

Tochigi

Gunma

Saitama

Chiba

Tokyo

Kanagawa

Shizuoka

4.2.2 Case Study - Senko


Figure 38: Senko Japan Logistics Property Network


Source: Bear Logi based on data from Japan Department Stores Association

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)

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.

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

0

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4000

5000

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7000

8000

9000

10000

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500

1000

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1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

ApparelFood

TotalOthers

MerchandiseGeneral

Sal

es b

y se

gmen

t (B

illio

ns o

f Yen

)

Total Sales (Billions of Yen)

Figure 43: Department Store Sales Transition (1998-2009)

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.

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.

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


5.2 Case Study - Amazon Japan


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14 11 12 13

411

s1

14

Saitama Prefecture

つくばJCTTsukuba JCT

川口JCTKawaguchi JCT

三郷JCTMisato JCT

KanagawaPrefecture

柏ICKashiwa IC

京葉道路・市川JCTKeiyo・Ichikawa JCT

ChibaPrefecture

TokyoPrefecture

IbarakiPrefecture

YamanashiPrefecture

Sasson Expressway 札樽自動車道

Central Expressway 央自動車道

The East Expressway 東自動車道

Hachinohe Expressway 八戸自動車道

Aomori Expressway 青森自動車道

Akita Expressway 秋田自動車道

Kamaishi Expressway 釜石自動車道

Yamagata Expressway 山形自動車道

Banetsu Expressway 磐越自動車道

Nihon-kai Tohoku Expressway 日本海東北自動車道

Tohoku Chuo Expressway 東北中央自動車道

Joshinetsu Expressway 上信越自動車道

Higashi Kanto Expressway 東関東自動車道

Tateyama Expressway 館山自動車道

Keiyo Road 京葉道

Shutou Expressway 路首都高速道

Kenodo 路圏央道

Second Tomei Expressway 道路第二東名高速

Kita Kanto Expressway 路北関東自動車道

Meishin Expressway 名神高速道

New Meishin Highway 路新名神高速道

Nagano Expressway 路長野自動車道

Cross Central Expressway 中部横断自動車道

Tokai Hokuriku Expressway 東海北陸自動車道

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

Ise Bay Expressway 伊勢湾岸自動車道

Ise Expressway 伊勢自動車道

Joban Expressway

常磐自動車道

Tokyo Gaikan Expressway東京外環自動車道

Chuo Expressway中央自動車道

Tohoku Expressway

東北自動車道

Kan-Etsu Expressway関越自動車道

Tokyo Bay Aqua-Line

東京湾アクアライン

Inner Circular Route

Central Circular Route

Route 1(Ueno Line)

Route 1(Haneda Line)

Route 2 (Meguro Line)

Route 3 (Shibuya Line)

Route 4 (Shinjuku Line)

Route 5 (Ikebukuro Line)

Route 6 (Mukojima Line)

Route 6 (Misato Line)

Route 7 (Komatsugawa Line)

Route 9 (Fukagawa Line)

Route 10 (Harumi Line)

Route 11(Daiba Line)

Yaesu Route

Bay Shore Route

Bay Shore Branch Route

Ohashi JCT～Kasai JCT

Edobashi JCT～Iriya

Hamazakibashi JCT～Haneda

Ichinohashi JCT～Togoshi

Tanimachi JCT～Yoga

Miyakezaka JCT～Takaido

Takebashi JCT～Bijogi JCT

Edobashi JCT～Horikiri JCT

Kosuge JCT～Misato JCT

Ryogoku JCT～Yagochi

Hakozaki JCT～Tatsumi JCT

Toyosu～Shinonome JCT

Shibaura JCT～Ariake JCT

Kandabashi JCT～Shiodome JCT

Namiki~Takaya

Showajima JCT～Tokai JCT

1967. 7. 4

2010.3.28

1969. 5. 31

1966. 12. 21

1967. 9. 30

1971. 12. 21

1976. 5. 18

1993. 10. 26

1982. 3. 30

1985. 1. 24

1971. 3. 21

1980. 2. 5

2009. 2. 11

1993. 8. 26

1973. 2. 15

2001,10,22

1983. 2. 24

Route 1 (Yokohane Line)

Route 2 (Mitsuzawa Line)

Route 3 (Kariba Line)

Route 5 (Daikoku Line)

Route 6 (Kawasaki Line)

Haneda～Ishikawa-cho JCT

Kinko JCT～Mitsuzawa

Honmoku JCT～Kariba

Namamugi JCT～Daikoku JCT

Kawasaki-Ukishima JCT～Daishi JCT

Saitama Shintoshin Route

Saitama Omiya Route

Yono～Saitama-minuma

Bijogi JCT～Yono

Kawaguchi Route Kohoku JCT～Kawaguchi JCT 1987. 9. 9

1984. ２. ２

1978. ３. ７

1990. ３. 20

1989. ９. 27

2010. 2010.

2006. 8. 4

1998. 5. 18

Route Name Section Date Complete Route Name Section Date Complete

16

16

16

16

16

16

16

Tomei Expressway

東名高速道路

Higashi Kanto Expressway

東関東自動車道

Keiyo Road

京葉道路

大泉JCTOizumi JCT

京葉道路・宮野木JCTKeiyo・Miyanogi JCT

Route Name Section Date Complete

千葉東JCTChiba Higashi JCT

成田JCTNarita JCT

八王子JCTHachioji JCT

鶴ヶ島JCTTsurugashima JCT

Kuki ShiraokaJCT久喜白岡JCT

中央JCTChuo JCT

東金IC JCTTougane IC JCT

海老名JCTEbina JCT

千葉港

羽田空港

横須賀港

東京港

川崎港

横浜港

成田空港Narita Intl. Airport

Central Circular Route中央環状線

Ｋｅｎ-O Expressway首都圏中央連絡自動車（圏央道）

Tokyo Intl.Airport(Haneda)

ChibaPort

TOKYO BAY

Kawasaki Port

YokohamaPort

YokosukaPort

TokyoPort

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, Katsushika-ku, 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)

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 passengers using Haneda Airport or Port of

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.

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.

6.1.1 Tokyo Roads

Figure 60: Major road network in Tokyo area



6.2.1 Tokyo Airports

東京国際空港

「写真提供：羽田再拡張Ｄ滑走路ＪＶ」

【空港概況】・種別：拠点空港（国管理空港）・設置管理者：国土交通大臣・位置：東京都大田区・面積：1,522ha・滑走路（長さ×幅）：（Ａ）3,000ｍ×60ｍ

：（Ｂ）2,500ｍ×60ｍ：（Ｃ）3,000ｍ×60ｍ：（Ｄ）2,500ｍ×60ｍ

・運用時間（利用時間）：24時間 (24時間)

【沿革】・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・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）・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）・平成１０年旧国際線旅客ターミナルビル供用開始・平成１２年Ｂ滑走路供用開始（2,500m×60m）・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

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’.

Tokyo International Airport (Haneda)

Haneda Airport is located in Ota-ku about 14km south of Tokyo. Haneda is Tokyo’s main domestic airport linking with 47 other Japanese airports. Recently it began to service international airlines and a network has been formed with 15 overseas cities. Haneda has the most passenger traffic in Japan with 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

Tokyo International Airport (Haneda)


Urbanization Promotion Area

Urbanization Control Area

Land Use Zoning

Urbanization should be controlled. Effectively a zoned area. See below as Residential, Commercial & Industrial

Controls the volume, use and height of buildings-

R esidentia l

C om m ercia l

Industria l

C lass I Low -R ise R esidentia l

C lass II Low -R ise R esidentia l

C lass I M id & H igh-RiseR esidentia l

C lass I R esidential

C lass II R esidentia l

S em i R esidential

N eighborhood C om m ercial

C om m ercia l

S em i Industria l

Industria l

Industria l U se O nly

D is tr ic t on ly fo r low-rise res identia l bu ild ings

D is tr ic t m a in ly fo r low-rise res identia l bu ild ings

D is tr ic t on ly fo r m id & h igh-rise buildings

D is tr ic t to p ro tec t res identia l env ironm ent

D is tric t a longs ide h ighw ays provid ing an appropria te trans ition between ad jacent res identia l d is tric ts and roadw ays

D is tr ic t w here loca l res idents buy da ily commodities

D is tr ic t for banks, theaters, bars & res taurants,departm ent s to res e tc .

D is tr ic t fo r ligh t m anufac turing & service fac ilities

D is tr ic t fo r various types o f m anufac turing fac ilities

D is tr ic t on ly fo r industria l m anufac turing fac ilities

D is tr ic t to p ro tec t res identia l env ironm ent

D is tr ic t on ly fo r m id & h igh-rise buildings

C lass II M id & H igh-RiseR esidentia l

Urbanization Control Area

Urbanization Promotion Area

Land Use Zone (UPA)

Fire Prevention & FAR Bonus

Other Zonings

District Plan

City Planning Area

Max. Floor Area Ratios (%)Max. Building CoverRatios (%)

50, 60, 80, 100, 150, 200

50, 60, 80, 100, 150, 200

100, 150, 200, 300, 400, 500

100, 150, 200, 300, 400, 500

100, 150, 200, 300, 400, 500

100, 150, 200, 300, 400, 500

100, 150, 200, 300, 400, 500

100, 150, 200, 300, 400, 500

200, 300, 400, 500 1,300

100, 150, 200, 300, 400, 500

100, 150, 200, 300, 400

100, 150, 200, 300, 400

30, 40, 50, 60

30, 40, 50, 60

30, 40, 50, 60

30, 40, 50, 60

50, 60, 80

50, 60, 80

50, 60, 80

60, 80

80

50, 60, 80

50, 60

30, 40, 50, 60

Logistics Real Estate PermissablePermissable in the 6 zones in blue

Is already Urbanized & development is promoted

Building Size Required Construction3 stories or moreMore than 100m2 floor areaOther than the above

Fire resitive building

4 stories or moreMore than 1,500m2 floor areaMore than 500m2; less than 1,500m2 floor area

3 stories

Fire resitive buildingFire resitive building/Quasi fire resistiveFire resitive buildingFire resitive buildingFire resitive building/Quasi fire resistive

Zoning

Fire ProtectionDistrict

Semi-Fire ProtectionDistrict Fire resitive building/Quasi fire resistive

or specified wood building

7.1 Zoning and Land UseFigure 81: Japan Zoning, Land Use and Fire Protection Controls



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.

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 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.

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.

7.4.2 Construction Prices

Figure 98: Japan Logisitcs Facility typical build costYear 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 Research0

20

40

60

80

100

120

140

Oil Price & Yen rate Yen / ＄

2008 2009 2010

2011 2012 2007 2008 2009 2010

2011 2012 2007

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000Steel yen/ t

H shape iron yen/t

Concret yen/m2

Steel Scrap yen/t

yenJapanese Building Material Costs

Source: Bear Logi Research. Based on "Daily Steel newspaper", "Concrete Association"Notes : 1)Concret is FC30 S18

2)Steel is SD295-D19

201020０920０8 2011 2012

Figure 97: Oil Price & Yen Rate (prior to Yen weakening)


Figure 99: Japanese Building Material Costs


Rents - TokyoAs 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.

In the Joto area (Edogawa, Katsushika, Arakawa, Adachi, Taito, Sumida-ku) and Johoku area (Suginami, Kita, Itabashi, Nerima-ku) 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.

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.

14

Saitama Prefecture

KanagawaPrefecture

ChibaPrefecture

TokyoPrefecture

IbarakiPrefecture

YamanashiPrefecture

Joban Expressway常磐自動車道

Tokyo Gaikan Expressway東京外環自動車道

Chuo Expressway中央自動車道

Tohoku Expressway

東北自動車道

Kan-Etsu Expressway関越自動車道

Tokyo Bay Aqua-Line

東京

湾ア

クア

ライ

ン

16

16

16

16

16

16

Tomei Expressway

東名高速道路

Higashi Kanto Expressway

東関東自動車道

Keiyo Road

京葉道路

千葉港

羽田空港

横須賀港

東京港

川崎港

横浜港

成田空港Narita Intl. Airport

Central Circular Route中央環状線

Ｋｅｎ-O Expressway

首都圏中央連絡自動車（圏央道）

2

1

15

34

19 20

22

21

23

24

7

8

13

12

6

5

25

28 27

26

11

10 9

Tokyo Intl.Airport(Haneda)

ChibaPort

TOKYO BAY

Kawasaki Port

YokohamaPort

YokosukaPort

TokyoPort

17

14

18

16

9.2 Rents - Tokyo

Figure 114: Greater Tokyo Rents Map (read with Figure 115)


【Other development plan】

Appendix 1 - Developments

Name: New East JapanLogistics Center Location: Kuki city, Saitama GFA: approx 33,170 ㎡

Completion: Apr 2014

Name: Baraki International Logistics NO. 2Location: Ichikawa-shi,Chiba GFA: approx 36,500 ㎡

Completion: Early 2014

64　Ajinomoto Logistics New East Japan LC 65　Nippon Express Baraki International logistics NO. 2 (Image)

Name: Sumitoko Warehouse Tokyo branch,Hanyu archive center NO.2 Location: Hanyu city, Saitama Site area: 34,014 ㎡

GFA: 24,380 ㎡ Start: Feb 2011Completed: Jan 2012

Name: Fujieda Logistics CenterLocation: Fujieda-shi, Shizuoka Site area: 10,794.70 ㎡

GFA: 11,535.91 ㎡

Start: Aug 2011Completed: Mar 2012

Name: Aichi Logistics CenterLocation: Ichinomiya-shi, Aichi Site area: 35,159.10 ㎡

GFA: 32,892.90 ㎡

Completed: Mar 2012

Name: Yao Logistics Center New Building ALocation: Yao-shi, Osaka Site area: 15,324.79 ㎡

GFA: approx 15,300 ㎡

Completed: Aug 2012

Name: East Japan Logistics CenterLocation: Kazo city, Saitama GFA: 11,570 ㎡

Completed: Aug 2012

Name: South Tokyo ALCLocation: Kawasaki-shi, Kanagawa Site area: 8,847 ㎡

GFA: 21,767 ㎡

Completed: Aug 2012

66 Hanyu Archive Center NO.2 67　Heiwamirai Fujieda LC

68　Alfresa Aichi logistics center 　 69　NTT logisco Yao logistics center

70 Orbis East Japan LC 71　Mediceo South Tokyo ALC

Name: Shiraishi Logistics Center Building DLocation: Miyako-gun, Fukuoka Site area: 19,493 ㎡

GFA: 21,771.90 ㎡

Completed: Aug 2012

Name: East Japan Logistics CenterLocation: Kawagoe city, Saitama Site area: approx 20,000 ㎡

GFA: approx 20,000 ㎡

Completed: Sep 2012

72　Vantec Kyushu Shiraishi LC Building D 73　Kaneka Food East Japan LC

Name: Kokubu FujisawaLogistics CenterLocation: Fujisawa-shi, Kanagawa GFA: 20,282 ㎡

Completed: Sep 2012

Name: Shizuoka branch Location: Shizuoka-shi, Shizuoka Site area: 9,711.35 ㎡

GFA: 13,686.11 ㎡

Completed: Sep 2012

74　Kokubu Fujisawa LC 75　Nippon Access Shizuoka branch


Appendix 6 - Due Diligence Checklist

(e) Are there any Maintenance manuals, reports, logs available (including the documents from legally required inspections) ?

(f) 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?

(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, Lifts, Security, Floor slab specification

(n) Fire protection – details of fire safety systems – sprinklers, smoke detection, extinguishers. Are the relevant approvals in place?

(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.

(p) 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?

(b) Have we obtained a document that describes the connections to potable water and sewage?

(c) Have we obtained a document that is relevant to the telephone line?

(d) Have we obtained a document that is relevant to gas?

9. Building Maintenance (a) Are there any building agreements in place for the

Property?

(b) Have these agreements been reviewed?

(c) Obtain or prepare schedule of all existing agreements

(d) Are there any defaults under these agreements?

(e) Are there any parts of the property which will be added later to be serviced in the building maintenance agreement?

(f) Are there any warranties which should be assigned under these service agreements?

(g) Are there service records?

(h) Review records and list the existing problems.

(i) Will any of the service agreements expire prior to purchasing the Property? If so, take necessary action.

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？(j) Check details of any security deposits, and creat a

list of the components.

(k) Is there a free rent period? If so, have we confirmed its length yet?

(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.

(r) Are new leases, assignments, sub-lettings or terminations being contemplated?

(s) What communications exist with the tenant(s)?

(t) Are there any disputes or conflicts with the tenant(s)?

(u) Any car parking, signage, contract issues? Is there anything that we should request the Vendor to do?

(v) Has a credit check been conducted on the tenant?

11. Outgoings

(a) Do we have a good understanding of all the property outgoings? Create a list.

(1) 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?

(2) Have we collected the information about depreciated asset tax?

(3) Do we have a good understanding of the building maintenance and administrative outgoings?

(4) Is there any major repair work being scheduled? If so, have we obtained the quotation for the cost?

(5) 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 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, JapanE-mail: [email protected] TEL:+81-3-5411-8336 FAX:+81-3-5411-7485Web: www.bearlogi.jp

JaPan Logistics real estate Handbook - 2013

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Logistics Real Estate HandbooK - 2013 - Bear Logi