SearchThe Japanese Diet recently passed the vice-capital bill. The vice-capital plan will focus on three major pillars: enhancing industrial competitiveness to establish an economic center; developing transportation networks and urban infrastructure; and setting up bases for national organs and special corporate legal entities. Additionally, there are plans to provide tax incentives for companies relocating their headquarters from Tokyo to the vice-capital. Currently, cities such as Osaka, Nagoya, Fukuoka, and Sapporo have expressed interest in applying. Among them, Osaka has the strongest momentum to become the vice-capital, with reports indicating that the ruling party intends to promote Osaka Prefecture to stand on equal footing with Tokyo, which will simultaneously help resolve the issue of power being overly concentrated in Tokyo.
If Osaka becomes Japan's vice-capital, its future transportation networks and urban infrastructure will be further developed to help disperse the influx of people from Tokyo. More large corporations are also expected to relocate from Tokyo to Osaka, further stimulating Osaka's economy. It is estimated that more population will move into Osaka in the future, thereby driving up rental rates and property prices in the city.
Osaka's Rental Market Excels in Diversification
As everyone knows, the number of inbound tourists to Japan has repeatedly hit record highs in recent years, with the total number of foreign visitors reaching 42.68 million for the full year of 2025. Sightseeing demand and urban development are driving up land prices. According to data from Japan's Ministry of Land, Infrastructure, Transport and Tourism, Japan's national average land prices rose by 2.7% in 2025, marking the fourth consecutive year of increases, with commercial land rising by 3.9%. However, investors should note that despite the overall rise in land prices, investors should first understand the real estate market of individual regions before investing. More importantly, they must consider whether there is underlying rental demand, accommodation demand, and resale demand to absorb the property after prices rise. If the sources of demand are too singular, the flexibility to rent or sell will be constrained when the market environment changes.
Take Osaka as an example. Beyond being driven by the positive news of its potential to become the vice-capital, Osaka is a diversified demand market. In addition to local housing demand, it also benefits from international tourists, business travelers, short-to-medium-term accommodation guests, and overseas investors. This is especially true in areas like Shinsaibashi, Namba, and Umeda—the first two being major tourist sightseeing attractions, while the latter serves as Osaka's core business district.
In fact, in recent years, Osaka's most expensive land prices have shown a trend of shifting southward. Traditionally, Umeda in the Kita Ward has always been Osaka's prime location for land values, serving as its largest core business district. However, according to the latest land price reports, commercial land prices from Shinsaibashi to Namba in Osaka's southern district rose by 25% year-on-year. This astonishing growth outpaced the increase in Umeda (the traditional northern land value king), marking the first time in six years that the southern district's land prices outperformed the northern district.
Shinsaibashi and Namba Projects Each Offer Unique Advantages
In fact, FMI Japan has been established for over a decade, and our ongoing deployment has always centered around developing Shinsaibashi and Namba. This is because the surge in overseas tourists will inevitably drive up the demand for retail and accommodation. Take The Peak Shinsaibashi Tsuki, which is currently on sale, as an example: it is not an ordinary residential project, but a flagship development equipped with star-rated hotel-grade amenities, including a luxury lobby reception, a professional gym, and a business office. The lobby reception has staff on duty daily during peak hours from 11:00 AM to 6:00 PM. Not only do they help guests with check-in and check-out, but they can also provide immediate professional assistance if guests need any help during their stay. Whether in terms of scale or level of prestige, this project is extremely rare in Osaka's core district. Coupled with Shinsaibashi's top-tier commercial circle—which I believe requires no introduction—there is a good reason why clients ask why our Shinsaibashi projects are particularly expensive: the project design and services alone are well worth the price.
For those with a more modest budget, you can also consider our other core development located in Namba. Situated in Naniwa Ward, The Peak Namba Minami Reserve has a more approachable price tag than The Peak Shinsaibashi Tsuki. While it lacks amenities such as a reception desk, gym, and business office, its convenience and rental yields are comparable to those of The Peak Shinsaibashi Tsuki. It is a 5-minute walk to the dual-line subway station Daikokucho Station, offering direct, single-line access to Umeda and Shinsaibashi, and is surrounded by over a hundred restaurants and shops. With future plans for the vice-capital, Namba is believed to be a key area for heavy development, holding limitless potential.
