CREAL Inc.

Business Details

The sole business segment of CREAL Inc. The company operates around three services: "CREAL," a crowdfunding-type real estate fund platform for individual investors; "CREAL PRO," targeting institutional investors and ultra-high-net-worth individuals; and "CREAL PB," a real estate investment service for individual investors. Through DX transformation of the entire real estate investment process, the company aims for the "democratization of asset management," opening up real estate investment—traditionally limited to wealthy individuals and institutional investors—to the general public. In June 2025, the company obtained Type 3 and Type 4 licenses under the Act on Specified Joint Real Estate Ventures, enabling off-balance-sheet operations utilizing SPCs, and the revenue structure is shifting from property sale income to fee income as the main driver.

Recent Overview

Despite declining net sales, gross profit and operating profit increased substantially, with the balance sheet becoming significantly leaner through utilization of the Type 3/4 licenses under the Act on Specified Joint Real Estate Ventures

In FY2026 (ended March 2026), net sales came to ¥37,795 million (down 9.6% year on year), mainly due to the reversal effect of a large-scale property sale (utilizing the balance sheet) in CREAL PRO in the prior period. On the other hand, gross profit rose substantially to ¥7,799 million (up 37.6% year on year) and operating profit to ¥2,942 million (up 49.5% year on year), driven by the shift to off-balance-sheet operations following acquisition of the Type 3/4 licenses. Total assets stood at ¥44,262 million (down ¥8,675 million year on year), with deposits received for silent partnership contributions decreasing by ¥23,562 million, resulting in a significantly leaner balance sheet. In December 2025, the company conducted a third-party allotment of new shares to five companies including SBI Holdings (share issuance proceeds of ¥4,332 million), substantially improving the equity ratio from 9.8% to 25.5%. As a subsequent event, the company resolved to issue the 9th series of stock acquisition rights (410,000 shares, exercise price of ¥678 per share) and to acquire treasury shares up to a limit of 410,000 shares and ¥410,000 thousand.

Key Products

Growth Drivers

• Transition to off-balance-sheet operations utilizing SPCs following acquisition of the Type 3/4 licenses under the Act on Specified Joint Real Estate Ventures, and a substantial improvement in gross profit margin (from 13.5% to 20.6%)
• Continued growth in the number of CREAL registered investor members (138 thousand as of end of March 2026, cumulative investment amount surpassing ¥104.7 billion)
• Strengthened financial base through a third-party allotment of new shares to five companies including SBI Holdings (equity ratio improved from 9.8% to 25.5%)
• Building a stable earnings base through a shift in revenue structure from property sale income to a fee income-centered model such as asset management fees
• Growth in the number of used studio apartment units sold in CREAL PB and a cross-selling strategy leveraging the CREAL member base
• Market conditions including recovering inbound demand, rising condominium prices in the greater Tokyo area, and continued domestic real estate investment demand from overseas investors
• Growing interest in individual asset management and alternative investments amid the new NISA system and the government's "Doubling Asset-based Income Plan"
• Earnings forecast for FY2027 (ending March 2027): gross profit of ¥8,890 million (up 14.0% year on year), operating profit of ¥3,290 million (up 11.8% year on year)

Risks

• Impact on the real estate market and rising funding costs from the Bank of Japan's monetary policy normalization (rate hikes in January and December 2025) (interest expense of ¥142 million, up 51% year on year)
• Rising construction costs due to surging raw material prices and labor costs (salaries and allowances of ¥1,615 million, up 57% year on year) and a substantial increase in SG&A expenses (¥4,857 million, up 31.3% year on year)
• A surge in energy prices and shortages/price increases in construction materials (a "naphtha shock") triggered by the US-Iran military conflict (Iran war) that occurred in February 2026
• CREAL's GMV showed only a slight year-on-year increase in the current period (affected by the launch preparation period following acquisition of the Type 3/4 licenses), making accelerating GMV growth a challenge going forward
• Increased complexity of accounting treatment due to the coexistence of on-balance-sheet and off-balance-sheet operations, and greater difficulty for investors in valuing the company (net sales forecasts will no longer be disclosed from the next fiscal year)
• Interest rate fluctuation and real estate market deterioration risk relating to real estate for sale balance of ¥20,310 million
• Impact on inbound demand from geopolitical risks such as China's request that its citizens refrain from traveling to Japan
• Macroeconomic uncertainty stemming from US policy trends and tariff policy, and downside risk to the Chinese economy
• Cash flow from operating activities was an outflow of ¥9,413 million (compared to an inflow of ¥10,021 million in the prior period), with cash outflow occurring due to a significant decrease in deposits received for silent partnership contributions