Among the items related to such matters as operating results and financial situation of the Tokyu Fudosan Holdings Group, the following may have a significant influence on investors’ judgment.

1. Risks caused by changes in the management environment

The businesses of the Group such as real estate leasing, real estate sales, facility management, real estate agency and real estate management are susceptible to business trends in Japan and overseas, interest rate movements, corporate performance, consumer spending, employment and income conditions, real estate market conditions, the competitive environment, policy changes by the Japanese government and the Bank of Japan, conditions in operating areas centered on metropolitan Tokyo and other factors. Those factors may adversely affect the profitability and earnings strength of each business, and the value of assets held.

2. Risks caused by interest rate fluctuations

The Group is borrowing money from financial institutions and raising funds by means including corporate bond issuance to secure funds for its operations such as real estate development, in addition to using funds on hand. The balance of the Group’s interest-bearing debt and its debt-equity ratio are 1,289.8 billion yen and 2.3 times, respectively, as of March 31, 2019. To minimize the burden of interest expenses and the effects of interest rate fluctuations, in financing, the Group relies mostly on long-term loans for its interest-bearing debt and uses variable rates for certain project loans while using fixed rates for most other projects, depending on the financial situation. The effect of any future rise in interest rates on operating results will therefore be relatively limited in the short term, but potentially significant in the medium to long terms.

3. Risks caused by changes in laws and regulations, taxation, and other restrictions

The Group’s businesses are subject to applicable laws and regulations, taxation, and other restrictions in Japan and overseas. Any future amendment and/or abolition of such regulations, establishment of new rules, or the application of new legal restrictions as a result of the expansion in the scope of the Group’s operations may have an impact on the development of its businesses, their performance, and/or the Group’s financial position.

4. Risks associated with information systems

The Company has been taking a number of security measures in the development and use of its information systems, including IT infrastructure enhancement and the maintenance of backup data. However, any systemic risk that has materialized or the leaking of confidential information including personal information may seriously affect business activities, operational processing and/or the Group’s social credibility.

5. Risks caused by stock price fluctuations

The Group owns marketable stocks. Any market decline or substantial fall in stock prices may have an adverse effect on the Group's operating results.

6. Risks associated with natural disasters, environmental problems, etc.

Any earthquake, rainstorm, flood, other natural disaster, war, riot, terrorism, accident, fire, or other man-made disaster in Japan and overseas, the identification of any environmental problem or any fault with real estate, or any radical development in population trends may negatively impact the Group's operating results and financial position in ways that include damages to owned stocks and the occurrence of disputes in connection with maters such as the performance of the duty of compensation.

7. Risks associated with real estate and other development, etc.

The Group may be compelled to delay projects, change plans or take other actions due to various factors in Japan and overseas that prevent projects from advancing according to initial plans in cases where it engages in operations including the development of real estate. Real estate development is susceptible to many external factors, including the need to outsource operations to construction companies and other third parties, rises in acquisition and development costs and inadequate construction work. Those factors may cause expenses beyond expectation to arise or force the Group to delay, change or discontinue development plans.

Any of the conditions described above may adversely affect matters, including the achievement of target indicators set in the medium-term management plan, the Group’s operating results or its financial position, when the condition emerges.

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