Osaka's office boom is reshaping Japan's market

Osaka’s Umeda area, western Japan's largest transportation hub, has undergone significant redevelopment in recent years. In 2024, the area witnessed its largest-ever new office supply, with five Grade A buildings[1] delivering a total net lettable area (NLA) of 210,000 sqm. Despite initial concerns about rising vacancy and declining rents, robust demand successfully absorbed this massive supply and maintained market stability.

"Grand Green Osaka" represents the most notable redevelopment in Umeda. This mixed-use project sits on a vast site north of JR Osaka Station and encompasses offices, retail, hotels, residential units, and MICE facilities. The South Building’s office area opened first in March 2025, with Grand Green Park Tower and Grand Green Gate Tower delivering approximately 110,000 sqm of new office space.

The integration with "Umekita Park," 4.5-hectare park facing Osaka Station, proves particularly noteworthy. Since the COVID-19 pandemic, enhanced common areas and comfortable surroundings have become increasingly important factors in promoting office returns. The park's presence serves as a crucial element that motivates employees to return to the office. Additionally, prime office locations contribute to corporate brand image enhancement and talent acquisition strategies. Major corporations, including Kubota, Fujitsu, Honda Motor and Shionogi, have become tenants in Grand Green Park Tower.

Large-scale redevelopment in Umeda delivered approximately 210,000 sqm of Grade A office supply in 2024 alone, representing a 1.3-fold increase compared to existing 2023 stock. Osaka's Grade A office monthly rent reached JPY 24,623 per tsubo in Q2 2025, showing an 8.5% year-on-year increase that surpassed Tokyo's 5.9% growth rate.

Previously, Osaka’s peak office rent reached JPY 23,574 per tsubo before the 2008 Global Financial Crisis (GFC), then fell to 70% of peak levels by 2010. However, office rents rose consecutively for 22 quarters from Q3 2014, recovering to pre-GFC levels by end-2019. The prolonged pandemic kept rents below these levels from 2022 onwards, but rents finally reached JPY 23,799 in Q1 2025, as high-quality new supply in 2024 combined with robust office demand. Looking ahead, limited new supply until 2030 means that tight supply-demand conditions and rental growth will likely persist.

Figure 1: Osaka CBD Grade A office rents and vacancy rate 

Source: JLL Research, 2Q25

The Osaka office market is expected to experience sustainable growth in the long term due to the following factors:

1. Increasing employment: Osaka Prefecture added 200,000 workers compared to three years ago (Q2 2025). Kansai's economic revitalisation and expanding business demand will continue supporting office demand.

Figure 2: Numbers of employees in Osaka

Source: Osaka Prefectural Government, JLL Research, 3Q25

2. Naniwa-suji subway line opening (scheduled for 2031): Travel time from Kansai International Airport to Umeda will shorten by approximately eight minutes to about 45 minutes. Improved accessibility to the Umeda/Nakanoshima area will further enhance locational value.

Conclusion

Osaka, exemplified by Umeda, is evolving from its traditional positioning as "Japan's secondary business centre" into a complex urban space where work, learning, and leisure functions converge. While high rent levels for premium station-connected and station-proximate locations are expected to be maintained, significant rent declines across Osaka remain limited. Ongoing redevelopment establishes a unique positioning, with Umeda expected to enhance its presence as a new symbol of the Kansai economy.