Rent reaches record high of JPY 25,420 per tsubo per month after seven consecutive quarters of growth

• The October Tankan Survey for Greater Osaka showed that business sentiment fell to 13 points from 14 for large manufacturers and to 30 points from 33 for large non-manufacturers.
• Net absorption totalled +22,000 sqm in Q3 2025. The main demand driver remained as relocations for talent acquisition, with companies upgrading workplace environment and corporate image.

Continued demand for human resource strategy purposes, with a series of relocations to Umeda and along Midosuji

• The Q3 2025 vacancy rate fell to 2.5%, a decrease of 80 bps q-o-q and 130bps y-o-y. With the limited availability of large floors in the Osaka market, tenants sought to secure floors quickly, resulting in a decline in vacancy rates in a wide range of areas. Demand is particularly high in Umeda and along Midosuji between Yodoyabashi and Honmachi.
• There were no new completions in the quarter. Yodoyabashi Station One, which completed previous quarter with NLA 39,000 sqm has seen steady absorption progress and is now approximately 80% occupied.

Rent rises for seven consecutive quarters

• The average monthly gross rent per tsubo was JPY 25,420, an increase of 3.2% q-o-q and 10.8% y-o-y. The previous rental peak was approximately JPY 24,600 in 2Q2020. The Osaka market has reached a new level in the quarter.
• Capital values increased by 3.5% q-o-q and 15.5% y-o-y in Q3 2025, driven by current rent trends. Cap rates remained stable from the previous quarter.

Outlook: The rental market remains tight while reduced property listings constrain investment activity

• The manifestation of secondary vacancies will be delayed due to soaring construction costs and delays in restoration work caused by labour shortages. While large tenant activity by major corporations appears to have completed one cycle, mid-tier companies are becoming more active, suggesting strong demand will continue.
• As for rents, the trend of rising rents is expected to continue over the long term, but the rate of increase is expected to moderate in the future, as the number of available properties that will cause rents to rise, as typified by new construction in Umeda, will become limited.