• Officeconsolidation demand fromgroup companies remained active,withnotablerelocations tonewly completed buildingsalong Umeda andMidosuji
• Thecompletion ofYodoyabashi GateTower resultedinatemporary increaseinOsakaGradeAvacancyratesto3.1%.
• Rents reached JPY26,313pertsuboper month, markingthesecond consecutive quarterofrecord highssincedatacollection began in2003.
Osaka’sGradeAofficemarketclosed2025onafirmfooting, withnetabsorption reaching34,000sqminQ42025.Relocation activitywas particularlypronounced asgroup companies consolidated branchandsalesofficesintoprimelocationstoimprove operational efficiency and enhance talentattraction. Thistrend supported theabsorptionofvacanciesinexistingbuildings.
Duringthequarter,Yodoyabashi GateTower (Chuo-ku;29storeysaboveground; totalfloorareaof132,000sqm)wascompleted. Whileleasing progressed steadily,thebuildingopened withvacantspaces,contributing toaq-on-q increaseinthevacancyrateof60bpsto 3.1%attheend ofQ4.Despitethisshort-termincrease, thevacancyratedeclined by130bpsy-on-y, reflecting sustainedunderlying demand. Averagerents reached JPY26,313pertsubopermonth attheend ofQ4,representing a3.5%q-on-q increaseanda12.4%y-on-y rise.Havingsurpassedthe previouspeakofJPY24,647recorded inQ22020– thehighestlevelsincedatacollection beganin2003–rentshavenow establishednew records fortwoconsecutive quarters.High-rentlease-upsinUmedacompletions continued drivingrental growth.
Intheinvestment market,estimatedcapratesincreased slightly,reflecting upward pressurefromrisinglong-term interestrates.Nevertheless, pricing roseby3.1%q-on-q and16.0%y-on-y, driven bystrong rentalgrowth. NotabletransactionsinQ4included JapanPrimeRealty Investment Corporation’s acquisitionfromTokyo Tatemono of4.6%co-ownership interestsinGrandFrontOsaka’sUmekitaPlazaSouthand NorthbuildingsforJPY9.2billionandJPY8.0billion,respectively, atNOIyieldsof4.0%and4.1%.
Outlook
According toOxfordEconomics forecastsasofDecember 2025,OsakaCity’srealGDPgrowthisprojected at+0.3%in2026and+0.2%in2027. Onlyone GradeAofficebuildingisscheduledforcompletion inQ32026–Honmachi 4-chomeProject(Chuo-ku;totalfloorareaof45,000sqm) –withno additional supplyexpected through2030.Strong leasingactivityisexpected todrivevacancy ratesdown to2.8%byQ42026,while rentsareforecasttocontinue settingnewrecords amidtightsupply-demand conditions. Capitalvaluesareexpected toincrease inlinewith rental growth, supporting continued investorinterestinOsaka’sofficemarket.
Fundamentals
Note:Financialandphysical indicatorsareforthe5KusGradeAofficemarket.Datais onanNLAbasis.
Historicalsupplyanddemandtrends