Is Osaka’s office supply uptick a cause for concern?

Around 90,000 tsubo of net rentable area is expected this year.

According to a Savills report, 2023 was a relatively quiet year in terms of new office supply in Osaka. As corporate performance and leasing activity continue to improve, the market is witnessing further stabilisation. 

Here’s more from Savills:

That said, observers may have some concerns, due to the new office supply in 2024 of around 90,000 tsubo NRA. The largest addition will be GRAND GREEN OSAKA, delivering nearly 35,000 tsubo of premium NRA to the market. However, the development appears to have experienced sound pre-leasing, with over half of the office space filled already. The developer seems to have provided significant incentives to a main tenant. 

Furthermore, the addition of premium, mixed-use office developments should invigorate the market, catering to ever shifting demand from tenants who are seeking more diverse amenities, such as exclusive dining and even sauna space. 

Indeed, many companies are utilising this period of recovery in the market to carry out long overdue office relocations and layout changes. Overall, while the large uptick in supply is likely to cause some temporal ripples, the absorption of upcoming offices looks to proceed rather smoothly with sound demand.