Osaka
• NewCompletions FullyLeased;VacancyRateDeclinesasExistingSpace isAbsorbed
• CapRatesEdge Higher,butCapitalValuesContinue toRiseonSustainedRentalGrowth
• VacancyExpected toRemain Around 3%withFurtherRent Growthin2026
Strongtenantdemandwasabsorbedacrossbothnewlycompletedandexistingfacilities,withnewdemandreaching377,000sqminQ42025,thehighest quarterlyfigureinthepasteightyears.Leasingactivitywasdrivenbyadiversifiedoccupierbase,includinge-commercecompanies,3PLoperatorsandretailers, reflectingthebroad-basedstrengthofthelogisticsmarket.
Newsupplytotalledtwobuildings(306,000sqm),bothofwhichwerefullyoccupieduponcompletion,underscoringrobustdemandforhigh-specification,welllocatedlogisticsfacilities.Vacancyalsocontractedacrossexistingstock,withtheGreaterOsakavacancyratedecliningby 1.5ppq-o-qto3.0%.Whilevacancy hadtemporarilyincreasedearlierin2025,reaching4.9%inQ2duetoawaveofnewcompletions,themarketsubsequentlyabsorbedthespacesteadily.Bythe endofQ4,thevacancyratehadnearlyreturnedtoitslate-2024level,remainingonly0.2pphighery-o-y.
TheaveragemonthlyrentinGreaterOsakaincreasedtoJPY4,291pertsubo,representinggrowthof1.1%q-o-qand3.2%y-o-y.Higherrentsfornewly completedprimefacilitieshaveliftedratesatsurroundingexistingproperties,reinforcingthemarket’sbroaderrentalgrowthtrajectory.
Reflectingrisinglong-terminterestrates,theestimatedcaprateedgedupslightly.However,capitalvaluescontinuedtorise, supportedbysustainedrental growth.Aspricingincreasinglyincorporatesexpectationsoffuturerentgrowth,propertiescurrentlyleasedbelowmarketlevelscontinuetotradeatrelatively lowcaprates.
Outlook:
Intheleasingmarket,someconcernremainsregardingpotentialsecondaryvacanciesarisingfromtenantrelocationsintonewfacilitiescompletedin2025. However,newsupplyin2026isexpectedtodeclinesharplyfromthepreviousyear,supportingcontinuedleasingmomentumandmaintainingvacancyrates aroundthelow3%level.
Rentsareexpectedtocontinuerising,drivenbyhigherconstructioncostsfornewdevelopmentsandspillovereffectsintoexistingfacilities.Althoughsome tenantsmayfaceaffordabilitypressures,overalldemandremainsstrong,underpinnedbystructuralgrowthine-commerceandongoingdistributionnetwork upgrades.Giventhehighoccupancyofexistingstock,themarketisexpectedtoremainlandlord-favourable,withtherentalgrowthtrendacrossGreaterOsaka continuingthrough2026.
Fundamentals
Note:OsakalogisticsreferstotheGreaterOsakaprimelogisticsmarket.Dataisonan NLAbasis.
Historicalsupplyanddemandtrends
s.m.(thousands)
OsakaLogistics MarketDynamics Q42025
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