Gaw Capital Selling Osaka Office Building to Mizuho Real Estate Green Fund

Rising rents and tight vacancy in Osaka have helped drive an asset sale by Gaw Capital Partners, with the Hong Kong-based fund manager announcing on Tuesday that it has agreed to sell the Matsushita IMP Building to a consortium led by Mizuho Real Estate Management.

The agreement for the sale of the 42,140 square metre (453,591 square foot) property in Osaka’s Chuo-ku, or central ward, was announced after Gaw Capital had been marketing the asset for around one year at an asking price of around JPY 45 billion ($303 million), according to sources familiar with the discussions. That asking price would have translated to a 3.7 percent cap rate, based on net operating income. 

In a separate statement, Mizuho Real Estate Management said it had agreed to acquire a 1990-vintage office building in Osaka with the participation of of several environmentally conscious investors through a green loan from Mizuho Bank. Renovated in 2022, the Matsushita IMP Building was completed in 1990, with other specifications noted by Mizuho also aligned with the property.

“The aim is to generate operating income while achieving energy consumption reduction targets through primarily facility operational improvements and renovation/renovation work,” Mizuho said. The building acquisition was revealed as part of the launch of the first Mizuho Green Recovery Fund, which aims to improve the environmental performance of real estate and achieve decarbonisation.

Tight Vacancy, Rising Rents

Gaw Capital, which had invested in the property on behalf of an unnamed institutional investor in 2020, is believed to have come close to, if falling somewhat short of, the target price for the Matsushita IMP Building, with market observers pointing to the ticket size, as well as the tenant mix and location as challenges to the sale effort.

Described by Gaw Capital as an A-/B+ office property, the Matsushita IMP Building is located in Osaka Business Park and connects directly to the development’s namesake station on Osaka Metro’s Nagahori Tsurumi-ryokuchi Line. 

Located on a 14,968 square metre site overlooking Osaka Palace, the property has 33,920 square metres of office space along with 2,846 square metres of retail. As of April last year the office element of the building was 99.3 percent occupied, with the marketing effort by CBRE and MUFG also pointing to the opportunity to redevelop the site for data centre use. 

According to marketing materials provided to prospective investors last year, the Matsushita IMP Building, which was renovated in 2022, averaged 95.3 percent occupancy in the three most recent years. Office rents in the tower are said to average JPY 16,000 per tsubo (3.3 square metres) per month, with 60 percent of the occupiers listed on stock exchanges. 

Rents for grade A office buildings in Osaka averaged JPY 24.623 per tsubo at the end of June, according to JLL, with vacancy of 3.3 percent having helped to propel leasing rates upward by 8.5 percent over the past year, the property consultancy said. During the first half of 2025 alone, Osaka office rents rose 5.5 percent from the end of 2024, according to Savills, as vacancy tightened by 2.5 percentage points. 

While a surge of more than 250,000 square metres of new space in the city last year temporarily pushed vacancy above 4 percent, JLL expects rents to continue to push rents upward as tenants look to improved workplaces as tools for talent acquisition.

With the 2025 World Expo in Osaka expected to stimulate the local economy, and a limited pipeline of office projects on the way, Savills also points to higher office rents in the city. “From 2026 onwards, the limited new supply is expected to result in a tighter demand-supply balance in the market, providing opportunities for further rental growth,” the brokerage said in a July report.

Green Value-Add

In its announcement, Mizuho said it is establishing the Mizuho Green Recovery Fund as a series with different units of the financial conglomerate helping to arrange financing for this initial acquisition under the strategy and for the investment vehicle.  

“By continuing to establish the Mizuho Green Recovery Fund as a series, we will work with investors to promote sustainability initiatives through real estate,” the company said in the statement. 

Mizuho Trust & Banking arranged financing for this first fund, while Mizuho Bank provided the sustainability-linked loan to finance the building acquisition and Mizuho Leasing is providing a mezzanine facility.

The green loan from Mizuho bank will evaluate the property’s performance each year against sustainability targets, such as reducing carbon emissions intensity, with borrowing terms adjusted according to scores received.

Industry analysts said that Mizuho plans to invest around JPY 200 billion over five years to acquire and upgrade aging office buildings. The strategy includes making updates to HVAC, lighting and other systems in older buildings, with an eye to opportunities to resell the enhanced projects at higher valuations.