Daiwa House: logistics innovator

If you need logistics services for e-commerce or are looking for store construction, Daiwa House may have the solution. It is about to break ¥120 billion in sales from its logistics business, offering multi-tenant logistics facilities ideal for SMEs and especially for anyone selling online. It is also a major, if low profile, SC developer and operator with leasable space reportedly rivalling even Aeon.

Daiwa House was established in 1955 as a specialist in steel frame buildings. Today it is one of the biggest builders of logistics facilities, shopping centres and retail stores. Uniqlo, Chiyoda and Aoyama Shoji are all major clients with a large number of their stand alone stores built and maintained by Daiwa. Since 2005 Daiwa House has also been building and operating its own retail sites, running them in cooperation with major retail chains. As of January, Daiwa operated 197 retail facilities across the country under a range of names such as Iias, Foleo, Life Garden, Frespo and Across Plaza, but it also has around 1,000 facilities with no particular site branding, giving a total 4.8 million sqm of leasable space under management – a figure that rivals even Aeon.

Daiwa’s third-party logistics (TPL) business is also growing strongly, both in building and managing new facilities. The current growth is due to high demand for state of the art, mult-tenant logistics facilities that has appeared post 2011 earthquake. This demand is partly based on concerns about maintaining supply after a similar disaster, but also due to the huge growth in e-commerce in the same period.

As a result, most of Daiwa’s DCs built since 2011 have been multi-tenant, and are state-of-the-art in terms of cost efficiency – its latest has LED lighting throughout controlled by tablet computers used by pickers so that lights are off unless absolutely required. This alone reduces lighting costs by 42%. One example is the new five-storey flagship DC in Sagamihara that opened in November, jointly developed with Uchida Yoko. By January the DC was already at 90% capacity with plenty of clients negotiating to take the remaining space.

Daiwa plans to invest around ¥200 billion in new logistics facilities in the three years from 2013, with demand high especially around major urban centres. It spent ¥100 billion on land in FY2013 alone. Daiwa has some 2.64 million sqm of TPL facilities under management and plans to have 4.6 million sqm by 2016.