Planning Parameters of the Two Blocks — FAR of 1,250% and 1,200%, Both Justified by “Lodging Functions That Strengthen International Competitiveness”

First, the figures from the primary sources. The Dojimahama 2-chome Specified Block consists of two sites: Block 1 on the north (approx. 0.57 ha, currently occupied by an office building completed in 1980) and Block 2 on the south across the road (approx. 0.02 ha, currently an hourly parking lot), totaling approx. 0.59 ha. The maximum FAR is 125/10 (1,250%) for Block 1 and 0/10 for Block 2; the minutes explain that the area was allocated “after setting the equivalent of 1,200% for the district as a whole.” Maximum heights are 198 m for the high-rise portion and 20 m for the low-rise portion, and wall-line restrictions apply only to Block 1. The draft for the Dojimahama 1-chome Specified Block, meanwhile, sets 120/10 (1,200%) on approx. 0.7 ha, with a two-tier high-rise configuration of 148 m and 104 m, and low-rise portions finely stepped at 23 m, 18 m, 14 m, 8 m and 3 m.

Comparing the statements of reasons reveals the design philosophy of each. 2-chome states that it will “introduce lodging functions that contribute to strengthening international competitiveness, along with vibrancy and exchange functions, and develop green open space where people can engage with culture and the arts,” while 1-chome states that it will “develop cohesive, greenery-filled open space as a new gateway to Kitashinchi, and introduce lodging and exchange functions that contribute to strengthening international competitiveness.” Both cite lodging functions as the headline reason for the FAR increase; 2-chome adds a local context of culture and the arts, and 1-chome that of a gateway to Kitashinchi.

Caution is needed regarding the construction schedule. The “2028 construction start, 2032 completion target” derives from secondary reports (August and October 2026) citing a trade newspaper; the August 5 minutes contain no schedule. This article treats these years as based on press reports, and likewise for reports that demolition will begin in 2026. The hotel brand and operator are not stated in any of the documents, and this article does not speculate on them. The developer is not named in the city planning documents, but secondary reports citing a trade newspaper identify it as Kanden Realty & Development (関電不動産開発) (based on press reports).

How Floor Area Is Created in a Specified Block — Converting Lodging Floor Area into FAR via “ΔV = Lodging Floor Area ÷ Site Area” and Stacking Public Contributions

A Specified Block is a system that redefines FAR, height and wall-line positions at the block level as a city plan, decided with the consent of landowners and others. Osaka City has designated 10 districts so far, including Hoenzaka-kita, Temmabashi, Dojima-nishi and Dojima 2-chome; Dojimahama 2-chome is the 11th, and 1-chome would be the 12th. What readers should grasp is that 600% does not simply “become” 1,250%; rather, the developer presents each stacked item and the city evaluates it — FAR is “built up.”

The foundation is Osaka City’s operating policy (reported March 2017) based on the “FAR relaxation system focused on the development of lodging facilities” notified by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in June 2016. It specifies that for development areas in commercial zones with a designated FAR of 600% or more and roughly 5,000 m² or more, Specified Blocks or similar are envisaged, with an upper limit on FAR relaxation of +300%, and further relaxation possible when combined with public contributions. The relaxation formula is ΔV = lodging facility floor area ÷ site area × 100% — in short, the amount of hotel floor stacked translates directly into bonus FAR. Requirements for lodging facilities include single rooms of 15 m² or more and twin rooms of 22 m² or more, a lobby available free of charge, dining facilities capable of serving three meals, and a tour-bus drop-off area.

The negotiation history for Dojimahama 2-chome (Bill No. 318 reference materials) illustrates this stacking process concretely. The initial business plan in October 2024 sought 600% → 1,200% on the basis of a high-grade hotel, effective open space, vibrancy functions and environmental/disaster-prevention measures. The city evaluated the lodging function and open space but asked for further study on childcare support functions, enhancing the urban appeal of the Dojimahama area, and more concrete environmental/disaster measures. The March 2025 revision added a licensed nursery for children aged 0–5 with a capacity of 30, a café restaurant and event gallery, incorporation of the southern site and public art, and solar power, dry mist and disaster stockpile warehouses, resulting in an allocation of 1,250% for the north and 0% for the south. In January 2026, MICE functions via an exchange hall (ballroom, boardroom), integrated north–south event operations and tourist information services were added, at which point the city proceeded to prepare the city plan.

Comparison with precedent is also instructive. The Dojima 2-chome Specified Block decided in 2018 (a mixed-use tower approx. 195 m tall that now includes Four Seasons Hotel Osaka) attached the condition “provided that 30/10 or more shall be for the hotel and its ancillary facilities” to its 120/10 FAR, writing a minimum amount of lodging floor area into the city plan itself. No such numerical condition appears in the Dojimahama 2-chome plan; the scale of lodging functions is instead secured by the explanation in the minutes (approx. 200 rooms, approx. 55 m²). The mechanics of the FAR relaxation system itself are covered in Japan Hotel FAR Bonus: 100 Rooms to 151-168 in Tokyo, Osaka, Sendai.

Floor Area Estimate — Of Approx. 71,000 m² of FAR-Counted Floor, Net Guest Room Area of 11,000 m² and Hotel Floor of 18,000–22,000 m²

Multiplying Block 1’s approx. 0.57 ha by 1,250% gives an upper limit of approx. 71,250 m² of FAR-counted floor area (0.57 ha = 5,700 m² × 12.5). From the minutes’ “approx. 200 rooms, avg. approx. 55 m²,” the net guest room area is approx. 11,000 m², about 15% of the FAR-counted floor. A hotel cannot consist of guest rooms alone: corridors, cores, back-of-house, restaurants and fitness are needed, plus, in this case, an exchange hall. Assuming a guest-room share of 50–60% for upper-midscale to luxury, hotel floor area is approx. 18,000–22,000 m², or 26–31% of FAR-counted floor. The Dojima 2-chome Specified Block’s condition of “30/10 or more for the hotel and ancillary facilities” equals 25% of its 1,200% FAR, so Dojimahama 2-chome’s hotel floor is likely on par with that precedent, or slightly larger by the amount of the exchange hall.

The remaining approx. 70% is planned for apartments, retail, the nursery and common areas, indicating that housing is the main recipient of the floor area. What matters for the hotel side is the floor depth of approx. 100 m² per room (55 m² guest room + around 45 m² of common and ancillary space). This becomes the denominator for the construction cost estimate below.

Room Stock Within 1 km — From 8,218 Rooms in 2017 to 14,171 in 2026 (1.72x); ~200 Additional Rooms Add +1.4%

Within a 1 km radius centered on Dojimahama 2-chome, as of November 1, 2026, there are 65 listed properties with 16,737 rooms, of which 44 properties with 13,686 rooms are operating. Tracking year-end stock for properties with a confirmed opening year, stock grew 1.72x in nine years, from 32 properties / 8,218 rooms in 2017 to 51 properties / 14,171 rooms in 2026. Growth centered on 20 properties / 6,800 rooms opened in the 2020s (including 220 rooms scheduled to open in February 2027), among them APA Hotel & Resort Osaka Umeda Eki Tower (アパホテル＆リゾート〈大阪梅田駅タワー〉) with 1,704 rooms (2023), Candeo Hotels Osaka The Tower (カンデオホテルズ大阪ザ・タワー) with 548 rooms and THE OSAKA STATION HOTEL with 418 rooms (2024), and Waldorf Astoria Osaka (ウォルドーフ・アストリア大阪) with 252 rooms (2025). Two properties with 36 rooms whose opening year is unknown are excluded from this trend.

Adding approx. 200 rooms to this base increases it by only +1.4%. Even using 14,391 rooms as the denominator — after first adding the 220-room Mitsui Garden Hotel Osaka Dojimahama Premier (三井ガーデンホテル大阪堂島浜プレミア), scheduled to open in February 2027 (included in listed stock within this radius but not yet operating) — the increase is still +1.4%, so the supply impact in volume terms is limited. According to JLL’s view in December 2025, new supply as a share of Japan’s existing stock is 1.7%, and only around 2% for the four major cities including Osaka; with soaring construction costs, a substantial increase in new openings over the next few years is considered unlikely. Dojimahama’s ~200 rooms, given the long 2032 time horizon, should reasonably be read in this context of “thin supply.” The market impact of developments that integrate hotels into the same building as housing is also examined in Residential Mixed-Use Hotels: 1,401 Rooms, 866 Arriving in 2027, which covers seven projects including the 220-room Dojimahama hotel.

In terms of quality, the picture changes. Business hotels account for the majority of operating stock within the radius at 7,698 rooms; deluxe hotels (2,645 rooms) and city hotels (3,222 rooms) together make up just over 40%. An average room size of 55 m² means competing on the same field as existing luxury properties — this is supply that affects the depth of the upper tier rather than volume.

Kita Ward Estimated Settled ADR — ¥10,400 in September 2026, -33.7% YoY in a Rebound Phase, While the Upper Tier Moves Differently

We check current demand using Kita Ward’s estimated settled ADR (median of covered properties). In September 2026, Kita Ward stood at ¥10,400 (N=74 properties), -33.7% versus ¥15,600 in September 2025 when the Expo was under way. Compared with pre-Expo September 2024 (¥9,600), however, it is +8.0%, so it is closer to reality to read 2025 as the anomaly. Neighboring Chuo Ward was ¥10,600 (-34.0% YoY, N=193) and Fukushima Ward ¥12,100 (-26.6%, N=6); the rebound is common across wards. The same phase on the Hyogo side was covered in Hyogo City Hotel ADR Down YoY 6 Months: Expo Rebound, Business +1.9%.

The median reflects prices within the radius, which are dominated by business hotels. The upper tier where 55 m²-class hotels compete needs a different yardstick. The next chart plots, for the 44 operating properties within 1 km, the September 2026 listed price (average of all plans, two guests per room, tax included) against room count, color-coded into a luxury band above ¥100,000, an upper band of ¥50,000–¥100,000, a mid band of ¥25,000–¥50,000, and below. By room count, the planned ~200 rooms × 55 m² falls between Conrad Osaka (コンラッド大阪, 164 rooms) and Waldorf Astoria Osaka (252 rooms), close to Four Seasons Hotel Osaka (175 rooms). Although pricing has not been announced, if it is the “high-grade hotel” the city describes, the plan reads as joining the “around 200 rooms × over ¥100,000” band occupied by these four properties (including The Ritz-Carlton Osaka (ザ・リッツ・カールトン大阪), 291 rooms).

Looking at actual levels in the upper tier, Waldorf Astoria Osaka (252 rooms, opened 2025) has an estimated settled ADR of ¥96,900 against a listed price of ¥181,400, and THE OSAKA STATION HOTEL ¥78,800. Conrad Osaka (164 rooms, opened 2017), Four Seasons Hotel Osaka and The Ritz-Carlton Osaka line up at listed prices of ¥110,000–¥160,000+, while the median listed price for Kita Ward’s deluxe hotel category was ¥58,900 (N=10 properties) and for the city hotel category ¥35,300 (N=19 properties). Even as the median runs 30% below the prior year, the upper tier has maintained listings above ¥100,000, and the depth of this tier forms the foundation to absorb the ~200 rooms in 2032. How Waldorf Astoria Osaka, a year and a half after opening, has set its prices relative to the Kita Ward median is tracked with monthly measurements in Waldorf Astoria Osaka Rates: ¥90K+ Floor at 18 Months, 5.4x Kita ADR. Hilton operates 37 hotels under nine brands in Japan; in Osaka, in addition to the above, it has Canopy by Hilton Osaka Umeda (308 rooms) and Hilton Osaka (562 rooms) (Hilton “Company Overview,” updated August 25, 2026).

To add context on supply and demand, Osaka Prefecture’s overall occupancy for September 2026 (estimate based on OTA listed inventory) was 80.4% (410 properties / 59,647 rooms, based on listings on major booking sites, observed at LT45–1), reaching 94–100% over the September 19–21 holiday weekend. This is an estimate based on the sell-through of inventory sold on OTAs and differs from actual property-wide occupancy, but it shows that while rates are in a rebound phase, volume is being filled.

Site Assessment — Official Land Price Up 62% in Six Years, Commercial Zone 600%, Dojima River Flood Projections as a Design Condition

As a basis for investment decisions, we organize land prices, zoning and disaster risk around Dojimahama using MLIT’s Real Estate Information Library. The nearest official land price benchmark to the site, “Kita-ku Dojima 2-chome 31-3” (370 m from Nishi-Umeda Station, commercial zone 600%), rose 62% in six years from ¥1,480,000/m² in 2020 to ¥2,400,000/m² in 2026, with double-digit growth continuing over the past three years at +14.5%, +17.8% and +17.1%. On the Kitashinchi side, “Sonezaki-shinchi 2-chome 42-33 et al.” (800%) is ¥4,110,000/m² (+15.4%), and on the Nakanoshima side, “Nakanoshima 2-chome 13-otsu et al.” is ¥7,100,000/m² (+11.8%). Station distance and FAR conditions differ, but the benchmark nearest the site (¥2,400,000/m²) is lower than these two points.

The flood projections are a condition common to the entire Umeda–Nakanoshima area, not a constraint unique to Dojimahama. Hilton Osaka’s location falls in the 5–10 m storm surge category and within the 0.3–2.0 m tsunami projection area, whereas the two Dojimahama blocks are outside the tsunami projection area. The temporary shelter space for stranded commuters, emergency generator and earthquake-resistant rainwater tank recorded in the minutes can be seen as the plan’s response to these site conditions. Equipment placement — such as whether to put electrical rooms and emergency power on lower floors or move them to upper floors — is directly subject to the design issues covered in 5 Station Areas, 29,764 Hotel Rooms: 24% Face 3–5m Flood Depths and 52 of 53 Bay-Area Hotels in Japan Sit on Top-Risk Liquefaction Ground.

Three Required-ADR Scenarios — Approx. ¥126 Million per Room in Construction Cost Only (Excl. Land), ¥46,000–¥77,000 at 75% Year-Round OCC

Finally, we back-calculate from the construction-cost side the level at which ~200 rooms of hotel floor at an average of 55 m² become viable. Assumptions are set in two stages. In Stage 1 (2025 actuals basis), given that Archi-Book’s compilation based on MLIT’s Building Construction Starts Statistics puts 2025 cost per tsubo at ¥2.405 million for steel (S) and ¥2.026 million for reinforced concrete (RC), we adopt ¥3.1–3.5 million per tsubo as a guide for the luxury segment. With hotel floor of approx. 100 m² (approx. 30.3 tsubo) per room, construction cost is approx. ¥94–106 million per room, or approx. ¥100 million at the midpoint of ¥3.3 million per tsubo. In Stage 2 (inflation over the construction period), compounding Turner & Townsend’s Japan construction cost outlook (+5.3% in 2026, +5.0% in 2027, and an assumed +4.5% per year from 2028) from 2025 to the construction midpoint of 2030 gives approx. 1.26x, or approx. ¥126 million per room. Both figures are construction cost only and exclude land, FF&E, pre-opening expenses and interest.

The logic of the calculation is simple. Construction cost per room × required yield gives annual GOP (gross operating profit) per room; dividing that by the GOP margin assumed in this article for a full-service hotel (25–30%) gives required total revenue. Because F&B and banquets account for a high share in a luxury hotel with MICE facilities, rooms revenue is set at 60% of total revenue; dividing by 365 days gives required RevPAR (rooms revenue per available room), and dividing by OCC returns the required ADR. The required ADR in mid scenario B (6% yield, 28% GOP margin, 75% year-round OCC) is ¥59,200 — below Waldorf Astoria Osaka’s estimated settled ADR of ¥96,900 for September 2026, and roughly on par with the median listed price for Kita Ward’s deluxe hotel category (¥58,900). Even scenario C, with the required yield raised to 7%, comes to ¥77,300, within the range of actual upper-tier levels.

Moving cumulative construction cost inflation and OCC simultaneously widens the mid-scenario required ADR to the following range. Even the harshest combination (¥150 million per room, 65% year-round OCC) gives ¥81,300 — below Waldorf Astoria Osaka’s estimated settled ADR of ¥96,900, but above THE OSAKA STATION HOTEL’s ¥78,800.

The point to emphasize is that construction cost alone, excluding land, produces this level. The official land price nearest the site (Dojima 2-chome 31-3) is ¥2,400,000/m², and although the Specified Block’s floor area is shared with housing and retail, allocating a land-equivalent cost to the hotel would push the required ADR higher. On the other hand, rising construction costs also act to restrain new supply, easing competition with the existing upper tier. If the “thin new supply” JLL points to continues, the likelihood of a sharp increase in upper-tier competition by 2032 is not high, which is an upside factor for this project. For how to read feasibility, see also Park Hyatt Sapporo: 157 Rooms Add 0.7% to Odori, ¥78,800 ADR Needed, and for construction periods, Hotel Construction: 24 Months Standalone, 49 Mixed-Use; 2029 Deadlines.

Investment Takeaways — Supply That Deepens the Upper Tier Rather Than Adding Volume, and Three Checkpoints to 2032

There are three points developers and lenders should check before 2032. First, the content of the Dojimahama 1-chome Specified Block plan. Once the plan is prepared after the public hearing process and submitted to the City Planning Council, it will become clear how the scale of lodging functions and the allocation between the 148 m and 104 m towers take shape. Whether the two blocks together reach a scale of 400 rooms, or 1-chome remains limited to small-scale lodging, will change the read on upper-tier depth. Second, the slope at which Kita Ward’s estimated settled ADR recovers from its pre-Expo level (¥9,600 in September 2024). Estimates based on listed levels at the time of research show a recovery into the autumn demand season, at ¥13,900 for October 2026 and ¥12,800 for November, but these will fluctuate as check-in dates approach. Third, the annual rate of construction cost inflation. This article assumed +4.5% from 2028, but if the cumulative increase to the construction midpoint moves from 1.26x to 1.35x, the mid-scenario required ADR would rise from approx. ¥59,000 to approx. ¥63,000 (from the high ¥50,000s to the low ¥60,000s).

Summary

The two Dojimahama Specified Blocks plan to create FAR of 1,250% and 1,200% on commercial land designated at 600%, with “lodging functions that contribute to strengthening international competitiveness” at the center of the stack. For 2-chome, the minutes confirm the breakdown of public contributions — a high-grade hotel of approx. 200 rooms averaging approx. 55 m² with an exchange hall, approx. 2,000 m² or more of open space, and a licensed nursery for 30 children — making it a case in which the way floor area is built up can be read concretely. The volume increment against the 14,171 rooms within 1 km is a small +1.4%; it is better positioned as supply that adds a new layer to the over-¥100,000 upper tier. Kita Ward’s estimated settled ADR is in a phase of -33.7% YoY due to the post-Expo rebound, but the upper tier has maintained listed prices above ¥100,000, and the required ADR on construction cost only, excluding land (mid case ¥59,200), is within actual levels. Toward 2032, feasibility after land allocation will need to be refined while tracking three variables: how the 1-chome plan takes shape, the slope of Kita Ward’s rate recovery, and the annual rate of construction cost inflation.