US-based industrial property developer ProLogis will invest 450 billion yen ($3.95 billion) in Japan to bring its total Japanese investment to 900 billion yen by end-2009, its Japan chief said on August 29.
The company, which started to invest in Japan in 2001, has already invested 450 billion yen of assets including those currently under development, but demand for large and efficient distribution centres remains strong, said Miki Yamada, president and co-chief executive of ProLogis in Japan.
"We have set a goal of 900 billion yen and we are progressing as planned," Yamada told Reuters in an interview. Yamada said corporations are under pressure to lower their inventory levels but the need to move goods swiftly and effectively to meet market demand remains strong. "Overall, inventories are falling and the absolute number of warehouses may be falling, but there is demand to renovate old warehouses and needs for new, large and effective distribution centres will increase," he added.
ProLogis currently operates 69 warehouses with total floor space of 3.4 million square metres, from Hokkaido in the northern part of Japan to Kyushu in the south.
With a gradual economic recovery and pick-up in land prices in 2006 for the first time in 16 years, the Japanese property market has turned competitive, making it harder to procure land or properties.
Nomura Real Estate Holdings Inc, for instance, unveiled earlier this year a plan to develop large distribution facilities by investing up to 200 billion yen in the next few years. From old establishments like Mitsubishi Logistics Corp to newcomers such as J-Rep Co Ltd, which tied up with Macquarie Goodman Asia, the number of players also grew.
ProLogis currently owns and manages $18 billion worth of assets globally, of which Japan, China and South Korea represent only 10 percent.