J-REIT: Osaka/Kyoto Site Visit Report

Research evidence excerpt

J-REIT: Osaka/Kyoto Site Visit Report

Update

June 8, 2026 05:47 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MJ-REIT | Japan Takuya Sato

Equity Analyst

Osaka/Kyoto Site Visit Report Takuya.Sato@morganstanleymufg.comToshiyuki Anegawa +81 3 6836-8913

Toshiyuki.Anegawa@morganstanleymufg.com +81 3 6836-8914

On June 4-5, we conducted site visits of several hotels owned by

J-REITs and also visited the Osaka Convention & Tourism Bureau,

CBRE's Kansai branch office, and Miki Shoji's Osaka branch office.

Our discussions and fact-finding were aimed at gathering insights

on real estate conditions in Osaka and the broader Kansai region. J-REIT

Japan

Offices: No large-scale office completions are scheduled from July 2026 through Industry View Attractive

2030-31, pointing to tight supply-demand. The vacancy rate stood at a low 3.0% as

of April, while rents rose +6.8% YoY. Even using conservative assumptions, some we

spoke with expected rent growth of ~+4.0% p.a. through 2030. Rising construction

costs are apparently prompting revisions to development plans. Transactions above

¥50,000/tsubo have been observed in Umeda, and above¥40,000/tsubo in

Yodoyabashi. These developments are also triggering strong upticks in rents for

existing properties.

Hotels: In Osaka, RevPAR declined ~15% YoY, impacted by China–Japan relations and

the drop-out of Expo-related demand. Travel through Kansai International Airport

has been constrained by its having fewer Europe/US routes compared with Haneda

and Narita airports. Demand from China has fallen by ~70%, broadly in line with the

reduction in flight capacity. In contrast, flights from Korea and Taiwan are expected

to continue increasing. Osaka hotels appear cheaper than in the past, resulting in

demand being siphoned off from peripheral areas.