Message from the President

Investor RelationsManagement Strategy

Message from the President

Yuji Okuma President & CEO
Yuji Okuma
President and
Representative Director

Challenges for These Changing Times
Anticipating Changes and Resolutely Confronting Them to
Transform into a Corporate Group that Continues to
Create Value through Group-wide Joint Development Efforts

Review of the fiscal year ended March 31, 2019 and results forecasts for the fiscal year ending March 31, 2020

Looking at the real estate business, falling vacancy rates and an upward trend in the rent level continued thanks to active demand for the expansion and extension of floor space from companies in the office building market. In the real estate investment market, the sales prices of properties also remained high amidst the favorable financing environment. In the market for built-for-sale houses, demand for properties, particularly those with high convenience in good locations, was firm, while sales prices remained high.


Consolidated results for the Group were operating revenue of \901.884 billion (up 4.1% from the previous fiscal year), operating profit of \80.205 billion (up 3.5%), ordinary profit of \70.744 billion (up 3.0%) and profit attributable to owners of parent of \37.459 billion (up 6.5%). Profit (profit attributable to owners of parent) reached a new record high for the third consecutive year.
In the fiscal year ending March 31, 2020, all businesses continue to show solid performance, and “SHUBUYA FUKURAS” will be completed in autumn 2019. In addition, facilities related to infrastructure including renewable energy, in which the Group has been promoting investments under the medium-term management plan, will begin operating in series. Given these developments, the Group forecasts its financial results as follows.


Results forecasts for the fiscal year ending March 31, 2020
Operating revenue ¥920 billion
Operating profit ¥82 billion
Ordinary profit ¥71 billion
Profit attributable to owners of parent ¥39 billion

Revisions to the targets values set in the medium-term management plan

The Group has been pursuing its growth strategies under the medium-term management plan 2017 – 2020, with “expansion of associated assets” and “creation of new demand” as the basic policy.

The Group is also focusing on further strengthening the foundations for the leasing business by actively investing in major inner city areas, including the greater Shibuya area, through its strengthened financial base, mainly as a result of capital increase through public stock offerings in the previous fiscal year.


Given that redevelopment and other projects that the Group is currently focusing on are making steady progress and that its business performance remains stronger than initially expected at the time of formulating the medium-term management plan, the Company has revised in May 2019 its financial targets set as the goals for fiscal 2020, the final year of the medium-term management plan, as follows.


Targets for the final year of the medium-term management plan
Operating profit ¥95 billion
Profit attributable to owners of parent ¥50 billion
Ordinary profit 2.3× or below
Debt/EBITDA (Interest bearing debt/EBITDA) 10× level
EPS (Earnings per share) ¥69.53
ROE (Return on equity) 8.0% or more

We will continue to work toward the sustainable enhancement of our corporate value over the long term and the realization of our vision of becoming a “corporate group that continues to create value” by proceeding with the three growth strategies under the medium-term management plan, namely “Urban development that proposes new lifestyles,” “Expansion of the scope of cyclical reinvestment business” and “Reinforcing stock utilization,” to achieve the new targets by working together as the Group.


Message to Shareholders

We will continue to work actively to build long-term relationships of trust with our shareholders.

The Group’s policy on shareholder returns is to maintain stable dividends and aim for a dividend payout ratio of 25% or more. Under this policy, for the fiscal year ended March 31, 2019, the Group has decided to pay a year-end dividend per share of 8 yen. In addition, we have reviewed and enhanced the shareholder special benefit plan, including our initiative of increasing the food items of “Ippin Otoriyose (specialty selection),” an online shopping site of the Group. In addition, in our shareholder coupons, we have also increased the facilities for the courtesy use of shareholders to include Tokyu Stays in Sapporo, Kyoto and Fukuoka as well as Hotel Harverst Kyoto Takagamine from this issue (shareholder coupons issued in June 2019).

I respectfully ask all shareholders for their continued support and cooperation in the years to come.


June 2019
Yuji Okuma, President and Representative Director

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