The start of “Tosei Group Long-Term Vision 2032” and Medium-Term Management Plan “Further Evolution 2026”
We wish to express our heartfelt appreciation for our shareholders for their excellent cooperation.
The Tosei Group conducts a wide range of real estate-related businesses in line with its corporate philosophy “To create new value and inspiration in all aspects of real estate as a global-minded group of seasoned professionals”.
The business environment surrounding the Group in the recent years has become increasingly uncertain amid revolutionary changes, including the escalation of climate change issues, the emergence of geopolitical risks, the declining birthrate and the aging of society in Japan, the acceleration of behavioral changes triggered by the COVID-19 pandemic, and rapid advances in digital technology. In order to adapt to such changes in the business environment, ensure the Group’s continued growth over the future, and enhance corporate value by contributing to the realization of a sustainable society, the company formulated “Tosei Group Long-Term Vision 2032” and the medium-term management plan “Further Evolution 2026” (December 2023~November 2026) which were announced in January 2024.
What we aim to be in the Tosei Group Long-Term Vision 2032 is as follows: “We will contribute to the realization of a sustainable society as a unique real estate portfolio manager with diverse solution capabilities”. We will further strengthen and expand the Tosei Group’s core competencies to achieve both business growth and contribution to sustainable society.
The fiscal year ending November 30, 2024 started off well We will continue to strive our business for the Tosei Group’s sustainable growth
The fiscal year ending November 30, 2024 has started. In the domestic real estate investment market, which is the Group’s mainstay market, transactions remained robust thanks to real estate investors both in Japan and overseas, due to such factors as Japan’s relatively wide yield gap compared to other countries and the continuing appeal of the stable rental market, despite certain level of concerns for a slowdown in the real estate trading market, reflecting the mounting expectations for a rise in domestic interest rates. The business forecast for this fiscal year, we expect consolidated revenue of ￥92.1 billion (up 16.0% YoY), operating profit of ￥17.7 billion (up 8.9% YoY), profit before tax of ￥16.5 billion (up 7.8% YoY), and profit attributable to owners of parent for the year of ￥11.2 billion (up 6.7% YoY). The Company will continue to push forward with the purchasing of properties that will become the source of future growth and promote real estate revitalization and development by leveraging our real estate solution know-how, while also focusing on improving the profitability of stable businesses.
We will also further promote initiatives geared toward the Group’s growth including studies of real estate revitalization and development menus conscious of the reduction of the environmental burden and social issues and promotion of DX within the Company as well as the expansion of the real estate DX businesses such as real estate crowd funding and digital matching of the sales of revitalized pre-owned condominium units.
The financial results announced for the first three months of the fiscal year ending November 30, 2024, were off to an extremely good start backed by strong performances in each of the Group’s businesses including real estate sales, with consolidated revenue of ¥34.8 billion (up 12.3% YoY), operating profit of ¥9.5 billion (up 41.4% YoY), and profit before tax of ¥9.1 billion (up 41.7% YoY), achieving 37.9% of the full-year forecast based on revenue and 55.7% based on profit before tax.
As for the operating segments, the Revitalization Business saw brisk sales of income-generating apartments and office buildings whose NOI had been improved through the Company’s value-adds, including the major income-generating apartment, “T’s garden Nishi-terao”, which had been transformed from an idle company housing to a rental apartment for families. In the Development Business, we sold the major logistics facility, “T’s Logi Ome” and the commercial facility, “T’s BRIGHTIA Jiyugaoka”. Such trading business activities drove the Group’s overall profit. Additionally, in the Stock and Fee Business, the Company’s stable source of income, each business progressed strongly including the Hotel Business and the Rental Business. Particularly, in the Fund and Consulting Business, the Group’s focus business, the balance of assets under management exceeded ¥2.4 trillion (an increase of ¥83.9 billion from the end of the previous fiscal year).
The Monetary Policy Meeting held in March 2024 decided to lift the Bank of Japan’s negative interest rate policy. Given that the short-term interest rate target will be raised to a moderate 0%-0.1% and that the extremely accommodative monetary environment will continue for the time being, the Company expects its impact on the domestic real estate investment market to be limited. Meanwhile, as investors are expected to become more selective in their choice of properties and changes to investment strategies are on the horizon, the Company will closely monitor the trends in the real estate market and continue to promote proactive business activities.
Going forward, we will work to enhance our corporate value to meet stakeholders’ expectations. We would appreciate your continued support.
April 2024
President and CEO