The project to redevelop the former Umeda Freight Yard site north of Osaka Station is called “Umeda Development.” The first phase of the project, the “Grand Front Osaka,” opened in 2013 as a pilot development area, and the second phase (covering approximately 17 hectares) is currently underway with further large-scale development. The project name for the second phase is “Grand Green Osaka (GRAND GREEN OSAKA),” with partial opening scheduled for September 2024 and full completion targeted for the fiscal year ending 2027. The development is being carried out by a consortium of nine companies selected through a public tender, led by Mitsubishi Estate Co., Ltd., with the cooperation of JR West Japan and the City of Osaka. The consortium includes prominent companies such as Hankyu Railway Co., Ltd., Mitsubishi Estate Co., Ltd., Osaka Gas Urban Development Co., Ltd., Orix Real Estate Co., Ltd., Kansai Electric Power Development Co., Ltd., Sekisui House Ltd., Takenaka Corporation, Mitsubishi Estate Residence Co., Ltd., and Obayashi Corporation. With its excellent location directly connected to Osaka Station, the area boasts the best access in the Kansai region, with seven stations and 13 train lines, including JR Osaka Station. This national project to create a new urban space in Umeda North Yard, truly the “last prime location in Osaka,” is a project of national significance.
The philosophy behind urban development: The fusion of “greenery” and “innovation”
The second phase of the Umeda development is driven by a vision that goes beyond mere commercial redevelopment. The concept can be summed up as creating a hub that fuses “greenery” and “innovation.” In 2014, when the policy was formulated, Osaka Prefecture and Osaka City set the urban development goal for the second phase area as “a world-class hub that fuses ‘green’ and ‘innovation,’” and the joint venture of developers also set the vision of “creating ‘Osaka MIDORI LIFE.’”
- Integration of city and nature (greenery): The most distinctive feature of Grand Green Osaka is the creation of an overwhelming green space in the city center. Umekita Park, which occupies about half of the site (approximately 45,000 square meters), will be one of the largest urban parks in the world located in front of a major transportation hub in western Japan. This concept was born from the idea of “Landscape First” urban planning, prioritizing green spaces over buildings and aiming to create a city within a park. In fact, approximately 320 species and 1,500 trees of diverse varieties have been planted, and the park, complete with lawn areas and waterfront spaces, is designed to envelop the entire city. The entire development area will include approximately 11.8 hectares of green space, including roadways, literally creating nature in the heart of the city. This rich greenery will enhance the city's dignity and appeal, warmly welcoming visitors while also contributing to the mitigation of the urban heat island effect and biodiversity. Above all, the open spaces where residents and visitors can sit or lie down for free have been well-received, and the very realization of “green-rich open spaces where everyone can freely access and where people's activities can flourish” is itself the goal of urban planning. In response to criticism that conventional redevelopment projects have focused on facilities for inbound tourists and the wealthy, resulting in a decline in places for ordinary citizens to relax, Umeda has positioned a huge public green space at its core to provide an urban oasis and emphasize openness to citizens.
- Innovation Hub: The other pillar is “innovation.” The Umeda development area is positioned as an innovation hub where knowledge from industry, government, and academia converges to create new industries and technologies. Osaka City's policy explicitly states the goal of becoming a world-leading innovation hub that “attracts and exchanges talent and technology from around the world to create new industries, technologies, and intellectual property, thereby becoming a growth engine for Japan.” Specifically, the plan is to incorporate facilities and systems within the district that enable startups, university researchers, and large corporate R&D departments to interact and collaborate, thereby promoting the creation of new industries through the exchange of knowledge. In the first phase of Grand Front Osaka, a university-industry collaboration hub called “Knowledge Capital” was established, and in the second phase, core facilities to promote open innovation will be developed. For example, a membership-based exchange hub called “Syn-SALON” and co-working facilities will be established to create a place where a wide range of players, from startups to large companies, can gather. In addition, a joint venture of businesses has established an organization called “Umeda 2nd Phase Future Society Creation Bureau (U-FINO)” to promote innovation through public-private partnerships and the promotion of demonstration experiments. By creating an environment where new businesses and technologies can emerge from both hardware and software perspectives, this area is expected to become a new hub that will drive the development of Osaka and the Kansai region and strengthen Japan's international competitiveness.
- International Exchange and Strengthening of International Competitiveness: A hub that integrates “greenery” and “innovation” is also an international exchange hub. The aim of this development is to attract human resources, companies, and investment capital from around the world through a rich urban environment and cutting-edge industrial clusters. As stated above, the mission of the Umeda development is to raise Osaka to the level of a world-class international city and bring new international competitiveness to Japan as a whole by “attracting capital and talented human resources from around the world and creating creative and innovative change (innovation).” In fact, overseas companies and investors are showing significant interest in Grand Green Osaka, and Osaka Prefecture and City are actively promoting the “International Financial City Osaka” initiative to attract financial companies. For example, Bain Capital Japan, a U.S. investment fund, announced in 2023 that it would establish its first office in Osaka (Grand Front Osaka), marking the first such move under the initiative. Such developments position the Umeda development as a catalyst for transforming Osaka into a business hub and international exchange city in the Asia-Pacific region.
Facilities and projects symbolizing Grand Green Osaka
The core of Grand Green Osaka, “Umeda Park,” features a lawn square, event plaza, and abundant trees, providing a relaxing space where residents and tourists can gather freely. Behind it, the high-rise buildings of Umeda, including Grand Front Osaka, create a harmonious blend of old and new landscapes.
Grand Green Osaka is planned to include numerous advanced and international facilities that embody the city's development philosophy. Here are a few examples.
- Umeda Park (Grand Green Osaka's “Green”): This urban park, which will become a symbol of the city, covers a vast area of approximately 4.5 hectares and features an event plaza, lawn area, babbling stream, cafes, and children's playground. The park was opened to the public ahead of schedule in September 2024, and music events and tree-planting festivals were held. The park is integrated with commercial buildings, offering green-surrounded resting areas and terrace seating where visitors can enjoy dining, embodying the concept of “blending parks and commerce.” In the future, the park will host seasonal markets, cultural events, pilot projects, and various other activities, truly becoming a stage for “green-inspired interaction.” It has also been reported that the park may serve as a testing ground for cutting-edge technologies such as drone delivery and autonomous driving, making it a future-oriented space that transcends the boundaries of a traditional park.
- Innovation Support Facilities and Office Complex: The building facing the park will house startups and research institutions, creating a “core functional facility” that fosters collaboration across industries and fields. Specifically, centered around the aforementioned exchange hub “Syn-SALON,” coworking spaces, labs, conference facilities, and other amenities will be developed, with the entire city serving as an open innovation testing ground. Kubota Corporation has already decided to relocate its headquarters to the high-rise building “Park Tower” within Grand Green Osaka by 2026, aiming to “create a space where diverse talents can gather and interact, and advance workplace reform by leveraging advanced ICT.” In addition, Honda R&D Co., Ltd. (Honda) has decided to establish its software development base there, and other major Japanese companies such as Rohto Pharmaceutical, Suntory, and Panasonic have also decided to move in or participate, creating a framework for inter-company collaboration and new business creation throughout the city. The high-rise office buildings are also expected to attract foreign companies to establish their Kansai bases, and if global companies continue to gather there, it will contribute to the enhancement of the Umeda area's status as an international business hub.
- Hotel Cluster (Attracting International Luxury Hotels): Three hotels have been secured for Grand Green Osaka, two of which are foreign-owned hotels under the Hilton brand. The convergence of world-class hotel brands will significantly enhance Osaka's accommodation infrastructure. This initiative aims to strengthen the “hospitality” infrastructure in anticipation of the rapid recovery of inbound tourism and increased demand due to the 2025 Osaka-Kansai Expo. For developers involved in redevelopment projects, attracting foreign-owned hotels that are the first of their kind in Japan or the region contributes to enhancing the overall brand value of the project. As a result, attracting luxury hotels has become a trend in recent large-scale development projects. In some cases, preferential measures such as relaxation of floor area ratio (gross floor area) regulations are available, and the attraction of Hilton has brought benefits in both the quality and quantity of urban development.
- Commercial and cultural facilities: The commercial zone in the second phase will feature facilities that are firsts for Osaka and Japan. The most notable of these is the “Time Out Market Osaka.” Produced by Time Out, a renowned city guide magazine in major cities around the world, this food hall marks the first Asian location for Time Out Market. It is a large-scale food court that brings together popular local restaurants and chefs, blending cultural elements such as music and art into an experiential dining experience. Having achieved success in cities such as London, New York, and Lisbon, the Osaka version is expected to blend Kansai's unique food culture with world-class entertainment. The facility was secured through a partnership between Hankyu Hanshin Properties and Time Out (headquartered in London, UK), marking a prime example of collaboration with an overseas company to create a new hub for food culture in Osaka. Additionally, the large-scale commercial facility “Grand Green Osaka Shops & Restaurants” will feature unique tenants from both domestic and international markets. Beyond retail and dining, the plan includes digital art exhibitions and community spaces, aiming to create a multifunctional commercial space that goes beyond a traditional shopping mall.
The key themes common to these iconic facilities are “fusion” and “innovation.” Through the fusion of parks and commerce, collaboration between domestic and overseas companies, and the integration of traditional culture and cutting-edge trends, Grand Green Osaka serves as a stage where diverse values intersect. In terms of design, the project features the participation of world-renowned architectural firm SANAA (led by Kazuyo Sejima) and U.S. landscape design firm GGN, bringing together global and local expertise. This is truly an advanced project worthy of being called a “future city.”
Overseas Capital and Foreign Company Participation Status and Background
As mentioned above, overseas capital is participating in the Umeda development in various forms, including foreign-owned hotels and facilities produced by overseas companies. We will summarize the current status, background, and objectives of this participation.
- Participation of foreign capital and companies: Currently, the most notable participation is in the hotel management and commercial sectors. Typical examples include the operation of two luxury hotels by Hilton (Waldorf Astoria and Canopy) and the expansion of a food market by Time Out UK, both of which are positioned as flagship stores in the Kansai region and Asia. Global companies are also exerting influence in tenant recruitment and management within districts. For example, JLL (Jones Lang LaSalle) Group has been entrusted with tenant management for the commercial hub “JAM BASE.” In terms of real estate investment, overseas funds are likely to acquire office buildings upon completion or invest through REITs. In fact, real estate investment in the Osaka area has reached a record high in recent years, and is on track to exceed 1 trillion yen annually for the first time in 2024, leading the Japanese market. This is due to growing interest from overseas investors in large-scale development projects in Japan, and world-class projects such as Umeda 2nd Phase are seen as “attractive assets worth investing in.” Furthermore, overseas companies are also expanding their presence in the office sector. Osaka Prefecture has set a target of attracting 30 foreign financial companies by fiscal 2025, and efforts to attract them are gaining momentum, starting with the opening of a new Osaka office by Bain Capital. The completion of Grand Green Osaka will provide a state-of-the-art office environment in front of Osaka Station, which could serve as a catalyst for foreign companies that have traditionally concentrated in Tokyo to expand their presence in Osaka. With the addition of international conference facilities and hotels, the infrastructure for accommodating business travelers will be further strengthened, making the option of “Osaka for business” a realistic possibility.
- Background and objectives of foreign capital investment: From the perspective of development entities and the government, the proactive efforts to attract foreign capital are driven by the need to enhance international competitiveness. For Osaka to compete on the global stage, it is essential to attract not only domestic capital but also global capital, companies, and talent to create new businesses and jobs. Fortunately, Osaka is home to world-class projects such as the 2025 Osaka-Kansai Expo and the Integrated Resort (IR) development plan, which are set to boost Osaka's global profile.
- A new railway line directly connecting to Kansai International Airport has also opened in the development area, improving accessibility for business travelers and tourists visiting Japan. Seizing this opportunity, a strategy to “attract global investment to Osaka now” is being advanced. The aim is not merely to secure funds but to accelerate innovation by incorporating overseas expertise and networks. For example, foreign-affiliated hotels that have been attracted to the area will bring world-class hospitality expertise, while facilities such as Time Out Market will introduce international trends to Osaka. Additionally, the participation of overseas design firms has improved the quality of the urban landscape. Such “collaboration with global expertise” is the source of value that enhances the city's appeal. From an overseas perspective, Osaka is also an attractive market for investment. Compared to Tokyo, real estate prices are relatively affordable yet offer significant growth potential. Osaka is also part of the Kansai economic region, a major market with high potential, and its business environment has been improved through administrative measures such as tax incentives and the establishment of one-stop service windows. Additionally, recent trends such as the weakening yen and prolonged low interest rates have further increased the appeal of Japanese real estate assets for global investors. As a result, Osaka has emerged as a “buying opportunity” alongside New York and London. The influx of overseas capital into Grand Green Osaka can be seen as a result of these mutual interests aligning.
The Impact of Urban Development and Overseas Capital
The relationship between urban development and overseas capital in the Umeda development project is expected to generate numerous positive effects, while also posing challenges (negative aspects) that require careful consideration. The following summarizes the main impacts.
- Positive effects:
- Economic revitalization and job creation: Foreign investment will flow in, leading to the opening of luxury hotels and new offices, which will create many jobs. In addition to the ripple effects during the construction phase, demand for operational staff and related service industries is expected to expand even after opening, boosting the economy of Osaka and the Kansai region. In fact, the redevelopment boom, including Grand Green Osaka, has driven Osaka's real estate market to record-high investment levels, leading the economy.
- Enhanced international competitiveness and urban brand: Attracting world-class hotels and developing internationally diverse facilities will enhance Osaka's visibility and brand power. Since only a limited number of cities can attract ultra-luxury hotels like the Waldorf Astoria, Osaka will gain recognition as an international city. Furthermore, the opening of Time Out Market Osaka signifies that Osaka will become a hub for global food culture trends, bringing diverse urban appeal to Japan beyond Tokyo. Such world-class urban spaces will also attract talented individuals from overseas, creating a virtuous cycle that leads to corporate recruitment and the hosting of international conferences.
- Introduction of technology and expertise and innovation: The latest technologies and business models will be brought to the region through collaboration with overseas capital and companies. For example, the entry of foreign-affiliated hotels will promote competition and integration with Japanese-style services, leading to an overall improvement in customer service levels. In addition, if overseas startups establish bases in Osaka, there is a possibility that new services will be created through collaboration with local companies. In fact, Umeda is home to a diverse range of overseas services, and the entire city is expected to function as a “laboratory for innovation.” In addition, even the development of parks incorporates overseas landscape design expertise, which is likely to have a positive impact on urban development in other cities in Japan in terms of landscape design.
- Improvement in the quality of the urban environment: Large parks and sophisticated neighborhood landscapes, carefully managed by the private sector, will also contribute to improving the quality of life (QOL) of citizens. As mentioned earlier, green spaces that can be enjoyed free of charge and diverse cultural programs are a great benefit to citizens, regardless of foreign capital. In particular, the “landscape first” concept is revolutionary in Japanese redevelopment, and if successful, it will attract attention as a model for urban regeneration nationwide. In other words, it is expected to have a ripple effect throughout Japan as a new urban development model originating in Osaka.
- Negative aspects and challenges:
- Loss of regional identity and uniformity: There is a concern that the development area may become uniform due to the prominence of overseas capital and global companies. If chain stores and brands found anywhere in the world dominate the landscape, the unique character of Osaka could be lost. However, the joint venture (JV) is aware of this issue and has made efforts to balance regional appeal with development, such as including local companies (e.g., Hankyu Hanshin and Osaka Gas) in the JV and allowing Osaka's renowned stores to open in the Time Out Market. Maintaining a balance between international and local elements will remain crucial moving forward.
- Concerns about a focus on the wealthy and foreign tourists: If the number of luxury hotels and high-end commercial facilities increases, there may be criticism that the area is becoming a place for the wealthy and foreign tourists. In fact, in the Umeda area, redevelopment targeting the wealthy has continued in recent years, and there are voices saying that there are fewer places where ordinary people can relax. However, in the case of Grand Green Osaka, the creation of a vast public park has ensured that citizens also have a place to relax. While this consideration for public interest rather than commercial priorities is commendable, it is essential to continue ensuring that the area remains “open to everyone” by, for example, avoiding excessive commercial events in the park and establishing fair usage rules.
- Risk of profit outflow and economic fluctuations: If overseas investment funds own the project, dividends and capital gains will flow overseas. Short-term speculative capital could also lead to the risk of a real estate bubble. Additionally, changes in the global economy could result in plan revisions or withdrawal, which are uncertain factors. To address these risks, the government and the joint venture between the operator and the developer must aim for stable operations with a long-term perspective. Fortunately, the overseas capital currently involved is primarily from hotel and commercial operators, who intend to establish their brands in Osaka, so the likelihood of them leaving in the short term is low. However, even if real estate ownership eventually transfers to overseas investment capital, it would be reassuring to establish a framework (such as mandatory participation in an area management organization) to ensure that benefits are returned to the local community and responsible business continuity is maintained.
- Impact on surrounding areas and regional disparities: While the mega-development is progressing successfully, there are concerns about competition with small and medium-sized shopping districts and existing facilities in the surrounding area. Looking at the Umeda area as a whole, it is likely that a win-win relationship can be established, but it would be counterproductive if the new facilities attract all the people and the long-established shopping districts become deserted. Business joint ventures and the government are implementing measures to attract visitors (such as improving accessibility) and tenants (such as actively recruiting local stores) in collaboration with surrounding areas, but it is necessary to continue to pay attention to the “harmonious development of the entire area.” In addition, it is desirable to implement a balanced urban policy within Osaka Prefecture to prevent the area around the North Yard from receiving too much attention and creating excessive disparities with other areas.
What the Umeda Development Project Brings to Osaka, Kansai, and Japan
The second phase of the Osaka Umeda Development Project, “Grand Green Osaka,” is not merely a redevelopment of a single area but a project that will have a significant impact on the Osaka-Kansai region and, by extension, Japan as a whole. Let us summarize its significance.
- A driving force for the Osaka-Kansai economy: Grand Green Osaka is positioned as a new growth engine for the Kansai economy. Umeda has traditionally been the largest business district in Kansai, but upon completion of this project, its concentration of businesses will further increase, enhancing its presence as an economic region capable of competing with Tokyo's one-city concentration. According to a survey by JLL, Osaka's commercial real estate investment exceeded 1 trillion yen for the first time in 2024, with Osaka leading Japan's real estate investment market. This reflects the effectiveness of the Umeda development in attracting domestic and international capital. Additionally, Kansai is set to host the World Expo and future integrated resort (IR) developments, which could create synergies and serve as a catalyst for building the “Osaka-Kansai era.”
- Realizing an International City: Osaka: Osaka Prefecture and City have long envisioned themselves as an “international city within Asia,” and the infrastructure and amenities to support this vision are beginning to take shape. Grand Green Osaka features hotels capable of hosting world-class VIPs, spaces suitable for international conferences and events, and office infrastructure that meets the needs of overseas companies. Furthermore, in terms of living environment—a key factor in a city's appeal—the area offers lush parks and sophisticated urban landscapes, providing a high-quality urban lifestyle (Osaka MIDORI LIFE). These are the urban infrastructure befitting an international city and have the power to make foreigners want to live, visit, and work here. In fact, Osaka City's corporate recruitment website lists “a city that foreigners want to visit and work in” and “the creation of an Osaka brand that is recognized and admired worldwide” as goals for Umeda. With the completion of Grand Green Osaka, Osaka will have the foundation to leap forward as an international city that can rival Tokyo and Singapore.
- Presentation of a new urban development model: The second phase of Umeda is also positioned as a model case for urban regeneration in Japan. While many redevelopment projects since the period of high economic growth have prioritized buildings, Grand Green Osaka takes a landscape-first approach that emphasizes public spaces and focuses on human interaction, health, and the environment, putting people at the center of urban development. This approach is attracting attention from various quarters as a direction for urban development in the SDGs era. A report by the Development Bank of Japan (DBJ) analyzes the social effects of “green-centered urban development” such as Umeda Phase 2 “Grand Green Osaka,” including quantitative attempts to measure improvements in well-being (citizen happiness) and environmental value. In other words, this project prioritizes not only economic returns but also the creation of social value, and depending on its outcomes, it could serve as a reference model for urban policies nationwide. Advanced examples such as public-private partnerships for park management and mechanisms allowing companies to use the entire city for innovation activities are also expected to be replicated in other cities.
- Ripple effects across Japan: If Osaka becomes vibrant, it will boost the vitality of the entire country. It is desirable from the perspective of risk diversification and regional balance in Japan for Osaka to establish itself globally as the second metropolitan area after Tokyo. The know-how cultivated through the Umeda development can be applied to the redevelopment of other regional hub cities (such as Nagoya and Fukuoka), and if concepts such as “coexistence of cities and nature” and “innovation creation through public-private partnerships” spread throughout Japan, it will enhance the overall urban competitiveness and international appeal of the country. Additionally, the Expo will provide an excellent opportunity to showcase Japan's cutting-edge urban development to visitors from around the world through the Grand Green Osaka experience. Such recognition could serve as a catalyst for further investment and tourism, creating a virtuous cycle.
Conclusion: Looking Toward the Future
The second phase of development in Osaka's Umeda area, “Grand Green Osaka,” is finally nearing completion after approximately 20 years of planning and preparation. The philosophy behind this urban development goes beyond mere economic development and embodies a vision for the future. The harmonious coexistence of a sustainable, people-friendly urban environment symbolized by “greenery” and an innovative industrial and exchange hub symbolized by “innovation”—this is a grand endeavor to realize the next-generation urban model in Osaka. The Umeda development, which incorporates collaboration with overseas capital and advances urban development according to global standards, is attracting much attention and expectation. Its success will not only contribute to Osaka's prosperity but also influence urban policies across Japan. As demonstrated by “Grand Green Osaka,” the future of urban development lies in harmonizing economic, social, and environmental aspects while pooling wisdom from both domestic and international sources. We look forward to the vibrant greenery and seeds of innovation sprouting in the heart of Osaka blossoming into a bright future for Osaka, the Kansai region, and Japan as a whole.