LA Holdings Co.,Ltd.

Business Details

The DX New Construction Real Estate Business develops Income Real Estate Development (Commercial Building "A*G" Series, Office Building "THE EDGE" Series, Luxury Rental Residence "THE DOORS" Series) and new condominiums ("Reve Grandir" etc.), selling to investment corporations, general corporations, and individual customers. The DX Real Estate Value Enhancement Business conducts the Land Value Enhancement Business (selling to corporations after rights adjustment and development planning) and the Investment Business (selling to investors after improving profitability). In Q1 FY2026 (ending December 2026), combined sales of both businesses were ¥4,394 million (approximately 54% of consolidated sales).

Recent Overview

Combined sales of both businesses decreased 21.8% year-on-year, but segment profit of the DX Real Estate Value Enhancement Business more than doubled.

In Q1 FY2026 (ending December 2026), the DX New Construction Real Estate Business recorded sales of ¥2,096 million (down 2.6% year-on-year) through the sale of "A*G Ropponmatsu" in Fukuoka City, but segment profit fell sharply to ¥394 million (down 43.0% year-on-year). Meanwhile, the DX Real Estate Value Enhancement Business posted sales of ¥2,298 million (down 33.7% year-on-year) due to the completion of sales in the Investment Business, but segment profit improved significantly to ¥642 million (up 104.4% year-on-year). There is no change to the full-year forecast (sales of ¥61,000 million, operating profit of ¥17,500 million), and the company expects to achieve the full-year target through increased handovers from Q2 onward, supported by inventory of ¥70,852 million at the end of Q1.

Key Products

Growth Drivers

• Increasing sales prices and profit margins through higher value-added Income Real Estate Development (establishing brands for urban commercial buildings, office buildings, and luxury rental residences)
• Strengthening acquisition of large-scale projects in prime urban locations, backed by improved fundraising capability (expanded commitment lines and public offering of ¥7,461 million)
• Expanding sales recognition through increased handovers of new condominiums ("Reve Grandir" in Okinawa, "La Attrait Residence" in regional cities)
• Progress on the largest land development project in Fukuoka Prefecture within the DX Real Estate Value Enhancement Business and its contribution to sales in FY2026 (ending December 2026) (contract balance of ¥7,059 million, up 70.9% year-on-year)
• Steady growth in the real estate investment market, backed by rising investment appetite for income real estate among domestic and foreign investors
• Expectations for increased handovers from Q2 onward due to the buildup of inventory of ¥70,852 million at the end of Q1

Risks

• Risk of quarterly performance volatility due to uneven timing of project handovers (Q1 progress rate is low relative to the full-year forecast)
• Risk of deteriorating project mix, as segment profit of the DX New Construction Real Estate Business fell sharply by 43.0% year-on-year in Q1 FY2026
• Increased interest-bearing debt costs amid rising interest rates (interest expense of ¥309 million in Q1 FY2026, up 54.6% year-on-year)
• Inventory risk due to a sharp increase in inventory (work-in-progress real estate for sale of ¥43,061 million) associated with large-scale projects and development properties
• Risk of sales concentration in major customers (in FY2025, ending December 2025, sales of ¥5,682 million to Vortex Inc. accounted for 12.2% of consolidated sales)
• Rising construction costs and pressure on development profit margins due to global increases in energy and raw material prices