April 30, 2025
Topics for the Fiscal Year Ended March 31, 2025
【Consolidated Financial Results】
Regarding the consolidated financial results for the fiscal year ended March 31, 2025, operating profit, ordinary profit, and profit attributable to owners of parent all reached record highs. This was due to factors such as leasing revenue contributions from the Mercure Tokyo Hibiya, which opened in the previous fiscal year, and recognition of gain on sale of investment securities resulting from the accelerated reduction of cross-shareholdings, and a decrease in income taxes - deferred resulting from the recognition of deferred tax assets. As for the forecast of consolidated financial results for the fiscal year ending March 31, 2026, operating profit, ordinary profit, and profit attributable to owners of parent are also expected to reach record highs. This is due to an increase in gain on sales of properties, and the recognition of gain on sale of investment securities resulting from the disposal of cross-shareholdings.
【Further Advance Management Conscious of the Cost of Capital and the Company's Stock Price, etc.】
The Company is working to reduce the balance of cross-shareholdings, which stood at approximately ¥17.5 billion as of December 31, 2024, to less than half. In the fiscal year ended March 31, 2025, the Company sold cross-shareholdings in three listed companies, generating proceeds of ¥954 million.
The annual dividend per share for the fiscal year ended March 31, 2025, is scheduled to increase to ¥172, consisting of an ordinary dividend of ¥142 and a special dividend of
¥30. This represents a ¥6 increase from the previous fiscal year's dividend of ¥166 (ordinary dividend of ¥116 and special dividend of ¥50), marking the eighth consecutive year of dividend increases. For the fiscal year ending March 31, 2026, the annual dividend per share is projected to be ¥176 (ordinary dividend of ¥146 and special dividend of ¥30), representing a ¥4 increase year-on-year and the ninth consecutive annual dividend increase.
【Further Advance Capital and Business Alliance with Taisei Corporation】
In March 2025, as part of a capital and business alliance with Taisei Corporation, the Company acquired a portion of the shares of Taisei Real Estate Asset Management Co., Ltd. (hereinafter "TREAM"), the asset management company of Taisei Corporation Private REIT, Inc. (hereinafter "TCPR"), which is a non-listed, open-ended REIT. In conjunction with this, the Company entered into a sponsor support agreement with TCPR and TREAM. Through this initiative, the Company aims to enhance corporate value by reinvesting gains from property sales, one of the growth strategies outlined in the Group's Long-term Vision.
【Progress of Redevelopment Projects in Sapporo】
Demolition work is progressing smoothly on the Odori-nishi 4 South, Type 1 District Redevelopment Project. Additionally, construction work of the Sapporo Station South Exit North 4 West 3, Type 1 District Redevelopment Project, has commenced in March 2025.
【Sustainability】
In the field of climate change in CDP 2024, the Company has been selected for the first time to the "A List," the highest rating in the field. The Company has also been recognized for the third consecutive year as "Outstanding Organizations of KENKO Investment for Health 2025 (White 500)."
Consolidated Financial Results for the Fiscal Year ended March 31, 2025Net sales decreased year-on-year due to decreasing revenue from sales of properties. Operating profit and ordinary profit increased year-on-year due to increasing revenues from the leasing business resulting from the contribution of Mercure Tokyo Hibiya, which opened in the previous fiscal year, and properties acquired in the same year. Operating profit and ordinary profit reached record highs.
Profit attributable to owners of parent increased year-on-year and reached a record high. In addition to the factors mentioned above, this was due to factors such as recognition of gain on sale of investment securities resulting from the accelerated reduction of cross-shareholdings, and a decrease in income taxes - deferred resulting from the recognition of deferred tax assets.
(Millions of yen)
Fiscal year ended March 31, 2024
Fiscal year ended March 31, 2025
Year-on-year
Year on year (%)
Full-year forecast for the fiscal year ended March 31, 2025*
Progress against full-year forecast* (%)
Net sales
44,433
42,075
(2,357)
(5.3)
41,700
100.9
Building Business
40,544
37,997
(2,547)
(6.3)
37,600
101.1
Asset Management Business
3,888
4,078
+189
+4.9
4,100
99.5
Operating profit
13,022
13,196
+174
+1.3
12,500
105.6
Building Business
12,639
13,010
+371
+2.9
12,400
104.9
Asset Management Business
2,197
2,355
+157
+7.2
2,300
102.4
Intersegment eliminations
(1,814)
(2,169)
(355)
-
(2,200)
-
Ordinary profit
11,463
11,651
+188
+1.6
10,900
106.9
Extraordinary income
1,218
799
(418)
(34.4)
Extraordinary losses
271
16
(254)
(93.8)
Profit attributable to owners of parent
8,450
9,565
+1,115
+13.2
9,300
102.9
Earnings per share (EPS) (Yen)
236.13
283.11
+46.98
+19.9
275.24
102.9
* Announced on January 31, 2025
Consolidated Financial Results by Segment for the Fiscal Year Ended March 31, 2025Year-on-year differences in segment results
Building Business
(Millions of yen)
Fiscal year ended March 31, 2024
Fiscal year ended March 31, 2025
Year on year
Year on year (%)
Main reasons for year-on-year differences in results
Net sales
40,544
37,997
(2,547)
(6.3)
The increase in leasing revenue mainly reflected contributions from the Mercure
Tokyo Hibiya, which opened in the previous fiscal year, and the ORSUS Shin-Osaka and ORSUS Togoshiginza, which were built and acquired in the previous fiscal year, as well as to success in filling vacant building space and raising leasing amounts.
¥0.4 billion to leasing revenue.
Note: The vacancy rate for the Company as a whole was 3.25% as of March 31, 2025.
etc., reduced leasing revenue by about ¥0.9 billion.
Leasing revenue
26,382
27,517
+1,135
+4.3
Revenue from sales of properties
12,780
8,965
(3,815)
(29.9)
Other
1,382
1,514
+132
+9.6
Operating profit
12,639
13,010
+371
+2.9
Gains on sales of properties
4,808
4,519
(288)
(6.0)
The decrease in sales of properties reflected a decrease in sales of real estate for
sale. (Osaka Kitahama Office, Sapporo Office 1 (part of the equity), Sapporo Office 2, and Fukuoka Residence were sold during the period under review.)
Leasing revenue
Operations of the Mercure Tokyo Hibiya, etc., contributed about ¥1.6 billion to leasing revenue.
Increased periodic revenues from acquired and newly built properties, etc., contributed about
Filing of vacant space along with increases in leasing amounts, etc., contributed about ¥0.4 billion to leasing revenue.
Departures of tenants from buildings scheduled for demolition due to redevelopment projects,
Reduced periodic revenues resulting from sales of properties, etc., reduced leasing revenue by about ¥0.4 billion.
Revenue from sales of properties
Asset Management Business
(Millions of yen)
Fiscal year ended March 31, 2024
Fiscal year ended March 31, 2025
Year on year
Year on year (%)
Main reasons for year-on-year differences in results
Net sales
3,888
4,078
+189
+4.9
Asset management revenue
2,565
2,781
+215
+8.4
Brokerage commissions
1,322
1,296
(25)
(1.9)
Operating profit
2,197
2,355
+157
+7.2
The Asset Management Business saw an increase in revenue from higher asset management revenue.
Due to the payment of participation fee for the Odori-nishi 4 South, Type 1 District Redevelopment Project and the North 4 West 3, Type 1 District Redevelopment Project, as well as the construction costs for Caption by Hyatt Kabutocho Tokyo, leading to an increase in total assets. Total liabilities increased, reflecting a rise of interest-bearing liabilities.
Due to the repurchase of 2.4 million shares, shareholders' equity has decreased, leading to a reduction in net assets.
(Millions of yen)
As of March 31, 2024
As of March 31, 2025
Year on year
Main reasons for year-on-year differences in results
Total assets
405,979
419,541
+13,561
Current assets
53,257
60,036
+6,779
The decreases in cash and deposits, as well as securities were mainly due to the payment of participation fee for the Odori-nishi 4 South, Type 1 District Redevelopment Project and the North 4 West 3, Type 1 District Redevelopment Project, the payment for the construction costs for Caption by Hyatt Kabutocho Tokyo, and the Company's repurchase of 2.4 million shares despite the financing through interest-bearing liabilities.
The increase in inventories mainly resulted from the reclassification from fixed assets to real estate for sale.
Cash and deposits/Securities
28,421
25,341
(3,080)
Inventories (including operating investments in capital)
21,766
31,036
+9,270
Other current assets
3,069
3,658
+589
Non-current assets
352,341
359,177
+6,836
The increase in property, plant and equipment was mainly due to the payment of participation fee for the Odori-nishi 4 South, Type 1 District Redevelopment Project and the North 4 West 3, Type 1 District Redevelopment Project, and construction costs for the Caption by Hyatt Kabutocho Tokyo.
Property, plant and equipment
275,522
282,350
+6,827
Intangible assets
31,320
31,164
(155)
Investments and other assets
45,498
45,662
+164
Deferred assets
381
326
(54)
Total liabilities and net assets
405,979
419,541
+13,561
Total liabilities
280,334
301,541
+21,207
The net debt-to-equity ratio is 1.9 as of March 31, 2025.
Interest-bearing liabilities
231,323
254,072
+22,749
Other liabilities
49,010
47,469
(1,541)
Net assets
125,645
117,999
(7,646)
The decrease in shareholders' equity was mainly due to the Company's repurchase of
2.4 million shares.
Shareholders' equity
92,235
86,749
(5,485)
Valuation difference on available-for-sale securities
17,339
15,265
(2,073)
Deferred gains or losses on hedges
(6)
54
+60
Revaluation reserve for land
16,076
15,928
(147)
Cash and deposits/Securities
Inventories
Property, plant and equipment
Interest-bearing liabilities
Shareholders' equity
(Note) Interest-bearing liabilities composed short-term borrowings, current portion of bonds payable, current portion of long-term borrowings, certain other current liabilities, bonds payable, long-term borrowings, and long-term accounts payable-other.
Key Performance IndicatorsShare price
EPS, ROE, and ROA
(Yen) 7,000
6,000
5,000
6,169
(Yen) 320.0
280.0
240.0
6.5% 6.3%
283.1
236.7 254.3 236.1
10.0%
8.0%
4,000
200.0
160.0
3.4% 2.9%
4.7% 4.7%
5.2% 5.8%
184.8
189.8
7.3% 7.7%
6.9%
7.9%
6.0%
3,000
2,000
1,000
5,405
5,497
5,774
4,673
5,030
5,287
4,700
3,669
4,120
3,955 3,785
4,080
2,581
2,155
3,022
2,313
3,456
3,455
2,820
2,377
2,445
2,630
2,837
3,190
3,270 3,334
3,5113,534
2,799
1,648
1,688
2,050 2,131
1,400
1,574
0
120.0
80.0
40.0
0.0
72.7
2.6%
2.8%
62.5
110.5 113.2 132.6 158.7
2.8% 3.3% 3.2% 2.9% 3.2% 3.1% 3.3% 2.8% 3.2% 3.2%
4.0%
2.0%
0.0%
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
Mar./14
Mar./15
Mar./16
Mar./17
Mar./18
Mar./19
Mar./20
Mar./21
Mar./22
Mar./23
Mar./24
Mar./25
Mar./14 Mar./15 Mar./16 Mar./17 Mar./18 Mar./19 Mar./20 Mar./21 Mar./22 Mar./23 Mar./24 Mar./25
Market value of assets for leasing and other purposes
Indicators of financial discipline
339.5
363.5
376.8
388.9
111.5
116.7
128.4
244.2
26.4
268.7 286.4
289.6
70.3
316.3
85.6
103.3
119.4
112.4
112.2
41.7
62.0
217.8 227.0 224.4 219.2
230.6
236.2
244.0
264.4
276.7
308.6 304.4 311.3
(Billions of yen) 500
400
300
200
100
420.1
421.2
439.8
(Times) 4.0
29.0% 31.0%
32.3% 33.3% 34.9% 32.5% 31.6%
31.1%
31.7%
30.0% 30.9%
28.1%
1.7
1.6
1.5
1.4
1.7
1.9
1.4
1.6
1.5
1.6
1.5
1.6
3.0
2.0
1.0
40.0%
30.0%
20.0%
10.0%
0
FYE
Mar./14
FYE
Mar./15
FYE
Mar./16
FYE
Mar./17
FYE
Mar./18
FYE
Mar./19
FYE
Mar./20
FYE
Mar./21
FYE
Mar./22
FYE
Mar./23
FYE
Mar./24
FYE
Mar./25
0.0
FYE
Mar./14
FYE
Mar./15
FYE
Mar./16
FYE
Mar./17
FYE
Mar./18
FYE
Mar./19
FYE
Mar./20
FYE
Mar./21
FYE
Mar./22
FYE
Mar./23
FYE
Mar./24
FYE
Mar./25
0.0%
Note: Net asset value per share is calculated as (net assets + after-tax unrealized gains on assets for leasing and other purposes) ÷ number of shares issued excluding treasury stock
Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2026Net sales are forecast to increase year on year, mainly as a result of an increase in revenue from sales of properties in the Building Business.
Operating profit, ordinary profit, and profit attributable to owners of parent are forecast to increase year on year and expected to reach record highs. This is due to an increase in gain on sales of properties in the Building Business, and the recognition of gain on sale of investment securities resulting from the disposal of cross-shareholdings.
(Millions of yen) | Fiscal year ended March 31, 2025 | Fiscal year ending March 31, 2026 (Forecast) | Year on year | Year on year (%) | |
Net sales | 42,075 | 49,000 | +6,924 | +16.5 | |
Building Business | 37,997 | 44,600 | +6,602 | +17.4 | |
Asset Management Business | 4,078 | 4,400 | +321 | +7.9 | |
Operating profit | 13,196 | 13,900 | +703 | +5.3 | |
Building Business | 13,010 | 13,700 | +689 | +5.3 | |
Asset Management Business | 2,355 | 2,500 | +144 | +6.1 | |
Intersegment eliminations | (2,169) | (2,300) | (130) | - | |
Ordinary profit | 11,651 | 11,700 | +48 | +0.4 | |
Profit attributable to owners of parent | 9,565 | 9,700 | +134 | +1.4 | |
EPS (Yen) | 283.11 | 290.43 | +7.32 | +2.6 | |
Year-on-year differences in segment results
(Millions of yen) | Fiscal year ended March 31, 2025 | Fiscal year ending March 31, 2026 (Forecast) | Year on year | Year on year (%) | Main reasons for year-on-year differences in results | |
Net sales | 37,997 | 44,600 | +6,602 | +17.4 |
Leasing revenue is forecast to increase mainly on an increase in hotel revenues due to the opening of Caption by Hyatt Kabutocho Tokyo.
Revenue from sales of properties is forecast to increase due to an increase in sales of real | |
Leasing revenue | 27,517 | 28,200 | +682 | +2.5 | ||
Revenue from sales of properties | 8,965 | 14,900 | +5,935 | +66.2 | ||
Other | 1,514 | 1,500 | (14) | (1.0) | ||
Operating profit | 13,010 | 13,700 | +689 | +5.3 | estate for sale.
| |
Gains on sales of properties | 4,519 | 5,900 | +1,380 | +30.5 | Caption by Hyatt Kabutocho Tokyo and a decrease of period revenue associated with sales of properties. | |
Building Business
(Millions of yen)
Fiscal year ended March 31, 2025
Fiscal year ending March 31, 2026
(Forecast)
Year on year
Year on year (%)
Main reasons for year-on-year differences in results
Net sales
4,078
4,400
+321
+7.9
Asset management revenue
2,781
2,900
+118
+4.3
Brokerage commissions
1,296
1,500
+203
+15.7
Operating profit
2,355
2,500
+144
+6.1
Asset management revenue and brokerage commissions are expected to grow stable.
Asset Management Business
Disclaimer
- This document is not intended to solicit investment. Users of this document are requested to use their own judgment when making final decisions about investing.
- Information other than historical facts presented in this document are forward-looking statements that were formulated according to certain assumptions and were based on judgments by the Company's management in light of currently available information as of April 30, 2025. Therefore, these statements may differ significantly from results announced in the future due to a variety of factors. The Company assumes no responsibility for any losses resulting from the use of this document.
- The Company might revise the forward-looking statements contained in this document based on new information or future events; however, this document will not be updated.