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

Business Details

The core business is the "individual unit renovation condominium sales business," in which used condominiums are purchased unit by unit, renovated with planning and interior design, and resold. The company also operates the Whole-Building Renovation and Sales Business and the New Condominium Buy-and-Resale Business. Focusing on the "Premium Renovation" series—priced at ¥100 million or more per unit under the keywords "central three wards," "100 sqm or more," and "high quality"—the segment offers high value-added products for affluent customers. In Q1 FY2026 (ending December 2026), the sales composition ratio rose to 41.9%, making it the largest segment.

Recent Overview

Driven by Premium Renovation sales, Q1 sales grew significantly, up 38.0% year-on-year

In Q1 FY2026 (ending December 2026) (January-March 2026), sales of the high-priced "Premium Renovation" series performed well, achieving sales of ¥3,393 million (up 38.0% year-on-year) and segment profit of ¥346 million (up 9.3% year-on-year). The sales composition ratio reached 41.9%, the largest among all segments, and this segment was the only one to post a significant increase in sales while the Group's overall sales declined 2.8% year-on-year, supporting overall performance. On the other hand, the growth rate of profit (9.3%) was well below the growth rate of sales (38.0%), indicating a declining profit margin.

Key Products

Growth Drivers

• Continued expansion of sales of the high-priced "Premium Renovation" series (driving the 38.0% year-on-year increase in Q1 FY2026, ending December 2026 sales)
• Expanding trend in the number of transactions and transaction prices in the Tokyo metropolitan area used condominium market, particularly the continued expansion of the high-priced market segment above ¥100 million
• Entry into the ultra-high-priced market and upgrading of the product lineup through the expansion of the "BILLION-RESIDENCE" brand
• Securing future sales capacity through the buildup of inventory balances
• Unit price improvement effect through specialization in high value-added products for affluent urban customers

Risks

• Declining profitability, as segment profit growth (up 9.3%) significantly lagged behind sales growth (up 38.0%)
• Risk of fluctuations in the number of units sold and inventory turnover risk associated with the shift to higher price ranges
• Increased interest burden associated with the buildup of inventory (expansion of interest expense due to increased borrowings)
• Risk of changes in purchasing appetite and real estate investment demand among affluent customers amid rising interest rates
• Risk of rising acquisition costs due to intensifying competition for high-priced properties in central urban areas
• Risk of quarterly performance volatility due to concentration or unevenness in project handover timing

Business Details

This is a stock-type business that leases real estate held as fixed assets to operators and others on a whole-building basis to secure stable revenue. The segment mainly constructs or acquires healthcare facilities with high social needs, as well as residential hotels and commercial facilities, and leases them to operators. It also handles tenant leasing management for pre-resale properties held as real estate for sale. This segment is positioned as a revenue base that complements the Group's flow-type real estate sales businesses.

Recent Overview

Stable occupancy of healthcare facilities and other properties resulted in year-on-year increases in both sales and profit

In Q1 FY2026 (ending December 2026), stable operation of leased assets such as healthcare facilities resulted in sales of ¥303 million (up 19.3% year-on-year) and segment profit of ¥136 million (up 11.3% year-on-year). Although the segment's sales composition ratio is small at 3.7% among all segments, it continues to contribute stable revenue.

Key Products

Growth Drivers

• Expansion of the leasing portfolio through new acquisitions of healthcare facilities and other properties
• Securing continued rental income through stable operation of held assets
• Maintaining occupancy rates through strengthening relationships with existing operators and identifying new operators
• Geographic diversification of the revenue base through expanded investment in major regional cities such as the Fukuoka area
• Continued active real estate investment backed by improved fundraising capability across the Group

Risks

• Increased borrowing costs due to rising interest rates (interest expense increased to ¥309 million year-on-year, potentially expanding its impact on segment revenue)
• Risk of declining occupancy rates due to deteriorating operator business conditions or withdrawals
• Risk of industry and tenant concentration due to concentrated investment in healthcare facilities
• Declining investment yields due to rising real estate acquisition costs
• Increased construction and maintenance costs due to global increases in energy and raw material prices

Business Details

The "Other" segment is a business segment not included in the reportable segments, including the Real Estate Sales Brokerage Business. Inter-segment internal sales (such as internal brokerage within the Group) are also recorded, and sales to external customers account for an extremely minor portion of total company sales. This segment is positioned to complement the Group's four main businesses, with its primary role being to contribute revenue to the Group as a whole through internal transactions.

Recent Overview

Both internal sales and segment profit increased significantly year-on-year

In Q1 FY2026 (ending December 2026), sales to external customers were ¥12 million (up 231.9% year-on-year), inter-segment internal sales were ¥154 million (up from ¥94 million in the prior-year quarter), and segment profit was ¥155 million (up from ¥95 million in the prior-year quarter). While sales to external customers remained at only 0.1% of company-wide sales, both internal sales and profit significantly exceeded the prior-year quarter, backed by growing demand for internal brokerage within the Group.

Key Products

Growth Drivers

• Increased demand for internal brokerage within the Group, driven by expanding transactions of the Group's four main businesses (internal sales expanded from ¥94 million to ¥154 million year-on-year)
• Potential expansion of derivative businesses such as M&A support and corporate investment businesses under the Group's new business creation policy

Risks

• Sales to external customers remain extremely small (¥12 million), creating risk of significant performance fluctuation depending on the presence or absence of deals
• Due to the structure of internal Group brokerage dependent on the transaction volume of the four main businesses, a decrease in the number of transactions in the main businesses directly affects this segment
• The segment remains below the scale threshold for promotion to a reportable segment, and no independent growth strategy has been disclosed

Business Details

The core business is development operations encompassing everything from land acquisition to product planning, design, construction, and sales. The segment develops Income Real Estate Development, including the urban commercial building "A*G" series, the office building "THE EDGE" series, and the luxury rental residence "THE DOORS" series, as well as new condominium development under the "Reve Grandir" and "La Attrait Residence" brands. Its main customers are investment corporations, general corporations, and individual customers, and its source of competitive advantage lies in concentrated investment in areas with high potential to become prime locations in the future, combined with high value-added product planning.

Recent Overview

Despite the sale of "A*G Ropponmatsu," both sales and profit fell below the prior-year quarter

In Q1 FY2026, the segment sold Income Real Estate Development property "A*G Ropponmatsu" (Fukuoka City, Fukuoka Prefecture), but sales were ¥2,096 million (down 2.6% year-on-year) and segment profit fell sharply to ¥394 million (down 43.0% year-on-year). This was affected by unevenness in the scale and timing of handover projects, and the company explains that the full-year forecast remains achievable through progress on projects scheduled for handover from Q2 onward.

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 central urban locations, backed by improved fundraising capability (building up inventory balances)
• Steady growth in the real estate investment market, backed by rising investment appetite for income real estate among domestic and foreign investors
• Expanded deployment of new condominium business into Okinawa and major regional cities
• Establishment of a stable fundraising structure centered on commitment line agreements and long-term borrowings

Risks

• Interest rate risk in real estate development businesses with long development periods (interest expense trending upward year-on-year)
• Inventory turnover risk and risk of valuation losses in the event of a deteriorating real estate market, due to a significant increase in inventory
• Rising reliance on interest-bearing debt due to sustained high segment liabilities
• Risk of quarterly performance volatility due to unevenness in the scale and timing of handover projects (Q1 segment profit down 43.0% year-on-year)
• Risk of rising construction costs due to global increases in energy and raw material prices

Business Details

This segment consists of two operations: the Land Value Enhancement Business (drawing out the latent value of land and selling to general corporations, etc.) and the Investment Business (selling to investors after enhancing profitability). By leveraging the Group's real estate business know-how across operations, the segment establishes a highly competitive, unique position through urban land planning, large-scale land development in regional cities, and conversion of existing real estate use. This is a reportable segment separated and made independent from the former "New Construction Real Estate Sales Division" and "Regenerated Real Estate Sales Division" starting in FY2025 (ending December 2025).

Recent Overview

Profit margin improved sharply due to completion of Investment Business sales, while sales declined significantly

In Q1 FY2026 (ending December 2026) (January-March 2026), sales were ¥2,298 million (down 33.7% year-on-year), partly due to the completion of Investment Business sales. Meanwhile, segment profit increased significantly to ¥642 million (up 104.4% year-on-year), with a notable improvement in profit margin. The decline in sales was due to unevenness in the timing of project handovers, and the company explains that the full-year forecast remains achievable through progress on projects scheduled for handover from Q2 onward.

Key Products

Growth Drivers

• Expected large-scale sales recognition in future periods from the advancement of the Group's largest land development project in Fukuoka Prefecture
• Securing a pipeline of handover projects from Q2 onward through the buildup of inventory balances
• Cross-functional utilization of know-how leveraging synergies with the DX New Construction, DX Regenerated Real Estate, and Real Estate Leasing businesses
• Value creation through use conversion and income improvement of existing real estate in the Investment Business
• Accelerating project handovers to achieve the full-year consolidated forecast for FY2026 (ending December 2026) (sales of ¥61,000 million, up 31.1% year-on-year)

Risks

• Since land development and investment projects recognize revenue in a lump sum at the time of handover, sales for each period are significantly affected by the number and scale of projects (Q1 FY2026 recorded a 33.7% year-on-year decrease)
• Increased fundraising costs amid rising interest rates (interest expense expanded to ¥309 million, up 54.6% year-on-year)
• Risk of rising acquisition prices and falling sale prices due to fluctuations in the real estate market
• Land development requires time for rights adjustment and administrative procedures, and construction delays could affect the timing of revenue recognition
• The Q1 progress rate relative to the full-year forecast is low, creating a risk that delays in handover plans from Q2 onward would directly affect full-year performance

Business Details

The "Other" segment is a business segment not included in the reportable segments (DX New Construction Real Estate Business, DX Regenerated Real Estate Business, DX Real Estate Value Enhancement Business, and Real Estate Leasing Business), and conducts the Real Estate Sales Brokerage Business, among others. In Q1 FY2026 (ending December 2026), sales to external customers were ¥12 million (composition ratio 0.1%), a minor portion of company-wide sales, but internal Group transactions (inter-segment sales of ¥154 million) account for the majority of sales, positioning this segment as complementary.

Recent Overview

Both external and internal sales increased significantly year-on-year.

In Q1 FY2026 (ending December 2026), sales to external customers increased significantly to ¥12 million (up 231.9% year-on-year). Inter-segment internal sales also expanded to ¥154 million (from ¥94 million in the prior-year quarter), and segment profit was ¥155 million (from ¥95 million in the prior-year quarter). This increase in internal transactions is believed to be mainly due to expanding transactions in the Group's main businesses. The composition ratio of external sales to company-wide sales remained at only 0.1%, and the segment's role as a complementary segment remains unchanged.

Key Products

Growth Drivers

• Maintaining and expanding inter-segment internal transactions as transactions in the Group's four main businesses expand
• Underlying support for brokerage demand backed by overall activity in the real estate market

Risks

• Sales to external customers remain extremely small (¥12 million), limiting the segment's contribution to revenue
• High dependence on internal Group transactions makes the segment structurally susceptible to fluctuations in the main businesses' performance
• Changes in segment classification may transfer some former operations to other segments, potentially further shrinking the segment's scale