A new era for Osaka’s flexible workspace
Flex space in central Osaka expands
Flexible workspace in central Osaka (consisting of Kita, Chuo, Naniwa, Nishi and Yodogawa wards) continues to expand as hybrid work proliferates, particularly among employees of large corporations. The total net leasable area of flex space in Osaka is approximately 58,070 sqm, a 40% increase from the end of 2019 (see Figure 1).
Flex space is not only being used by small and medium-sized enterprises and start-up companies but also by large corporations, which have allowed office workers to work remotely from workspaces other than traditional offices since the onset of COVID-19. Low initial set-up costs, move-in ready features, and flexibility in terms and conditions compared to traditional leases are often cited as key drivers for corporates opting for flex space.
Headquarters, satellite offices and business continuity planning are some of the ways flex space in Osaka are used. Domestic operators are also adding their own self-operated flex space brands. One of the largest domestic developers, Mitsui Fudosan, has opened several ‘Workstyling’ locations in Umeda and Honmachi, and Nomura Fudosan has opened several of its serviced office series ‘Human First Office’ in central Osaka.
Local operators like SYNTH have also partnered with flex operators like Business-Airport, the coworking series owned by Tokyu Fudosan, and more locations are likely to open in the future.
The share of flex space in the Osaka Grade A office stock is now slightly more than 1%, and almost half of the total stock of flex space in Osaka 5-ku’s is located in prime offices. Additionally, several large-scale locations are scheduled to open in newly completed Grade A office buildings next year, including a two-floor flagship workspace for HK-based Compass Offices in Inogate Tower and a full floor for Signature in Osaka Umeda Twin Tower South.
Going forward, flex operators will have more opportunities to secure prime offices as the Osaka Grade A office vacancy level is expected to increase in 2024 due to the completion of a record amount of new supply.
Despite the recent expansion of the flex industry, the ratio of flex space to Grade A office stock is still low on a global basis. In an environment of work style reforms and increased competition for talent, there is a lot of anticipation for the future of flex space.
Figure 1: Flexible workspace in Osaka 5-ku’s (as of the end of Sept 2023)
Figure 2: Flexible workspace in central Osaka vs Osaka Grade A office (as of the end of Sept 2023)