ENVALITH
株式会社プロパスト logo

PROPERST CO.,LTD.

3236・Standard Market・Real Estate

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株式会社プロパスト logo
PROPERST CO.,LTD.3236

Business

Propust Co., Ltd. was founded in 1987 and is a Tokyo metropolitan area-focused real estate developer listed on the Standard Market of the Tokyo Stock Exchange. In its core Rental Property Development Business, the company develops mid-sized, low- to mid-rise RC-structure rental apartments near train stations and sells them to domestic and overseas high-net-worth individuals and investment funds. In the Value-Up Business, the company acquires used income properties valued at approximately ¥300 million to ¥1 billion, enhances their value through renovation and leasing, and sells them in the short term. In the Condominium Development Business, the company develops and sells condominiums targeting singles and power couples, leveraging its unique planning and design capabilities. For FY2025 (ended May 2025), net sales were ¥27,839 million, with the Rental Property Development Business accounting for approximately 65% of sales, making it the core business.

Business Model

A flow-based business model that selectively sources properties near stations in the greater Tokyo metropolitan area and sells them after adding value through proprietary design and planning capabilities. In the leasing development business, the company handles everything from land acquisition through completion and sale, while the value-up business enhances capital efficiency through short-term turnover sales involving renovation and leasing of used income-producing real estate. Funds for property acquisition are raised through borrowings from financial institutions, with a structure in which borrowings are repaid through sales; the company sets a financial target of maintaining an equity ratio of 40% or higher.

Company Strengths

In the Rental Property Development Business, the company specializes in station-proximate areas in central Tokyo metropolitan locations, selling 19 projects in FY2025 (ended May 2025). The regional advantage of the properties sold has been highly valued by domestic and overseas high-net-worth individuals and investment funds, resulting in net sales of ¥18,002 million and segment profit of ¥3,278 million. The market environment, characterized by continued supply constraints and expectations of further price increases, has served as a tailwind.

The number of projects sold in the Value-Up Business increased significantly from 5 in the previous fiscal year to 18, with net sales growing rapidly from ¥2,320 million to ¥9,824 million (up 323.5% year on year) and segment profit growing from ¥350 million to ¥1,324 million (up 278.1% year on year). Under a policy emphasizing inventory reduction and turnover, segment assets were compressed to ¥1,572 million, improving asset efficiency.

The equity ratio as of the end of FY2025 (ended May 2025) stood at 40.1%, up 7.6 percentage points from the end of the previous fiscal year, achieving the management target of 40% or higher. Total net assets expanded to ¥12,175 million (up 16.5% from the end of the previous fiscal year), and interest-bearing debt was also reduced through a ¥3,268 million decrease in long-term borrowings. Cash flow from operating activities turned positive, reaching ¥7,641 million.

ENVALITH's Perspective

FY2026 (ending May 2026) is the first year of consolidation, making year-over-year comparison difficult, but on a non-consolidated basis, revenue was ¥21,664 million (down 22.2% year on year) and operating profit was ¥2,562 million (down 23.1%), reflecting a significant decline in both revenue and profit. On a consolidated basis, revenue of ¥29,465 million was recorded due to the incorporation of three months of Ogawa Construction's results (January to March 2026), but this was weighed down by zero revenue in the condominium development business and an inventory valuation loss (segment loss of ¥139 million). Deterioration in the cost ratio due to rising construction costs (cost of sales ratio of 82.6%) is pressuring profit margins, and the operating margin of 11.0% warrants close attention compared to past levels.

The projected increase in revenue for the next fiscal year is mainly attributable to the full-year consolidation of Ogawa Construction (versus three months in the current period) and the sales plans for 12 rental development projects and 6 value-up business projects. Meanwhile, the condominium development business is not expected to record any revenue in FY2027 (ending May 2027) either (development is expected to take approximately two years). Due to an increase in cost burden, profit margins are forecast to decline, with net profit attributable to owners of the parent expected to decrease from ¥1,879 million in the current period to ¥1,618 million. Trends in construction material prices and labor costs, along with order profitability, will be key to performance.

The consolidation of Ogawa Construction has added the construction contracting business (external revenue of ¥7,801 million, segment profit of ¥772 million), which can be viewed positively as reducing reliance on flow-type real estate revenue. However, new management challenges have emerged, including the recoverability of goodwill of ¥743 million (amortization of ¥14 million in the current period), the existence of non-controlling interests of ¥3,352 million, and the need to address risks specific to the construction industry, such as soaring material prices and extended construction periods. Softening in the external environment also warrants attention, such as the first-month contract rate for condominiums in the greater Tokyo area falling below 70% for three consecutive months (64.9% in May 2026).

Growth Strategy

The company aims to achieve substantial revenue growth in FY2027 (ending May 2027) through full-year consolidation of the construction contracting business and active sales of rental development and value-up properties.

In FY2026 (ending May 2026), only three months (January to March 2026) were consolidated, but in FY2027 (ending May 2027), the business will be fully consolidated for the entire year, significantly increasing its contribution to revenue and profit. The company plans to pursue repeat orders from existing customers as well as sales activities targeting a broad range of clients, while thoroughly implementing order-taking activities focused on profitability and appropriate cost management.

In FY2026 (ending May 2026), 19 projects were sold, generating revenue of ¥19,779 million. In FY2027 (ending May 2027), sales will be limited to 12 projects due to a policy of inventory reduction and strengthening the financial structure, with profit margin expected to decline due to increased cost burden. The company will continue to acquire new properties in carefully selected prime locations within Tokyo's 23 wards, while seeking to pass on costs to sale prices.

In FY2026 (ending May 2026), 3 projects were sold (revenue of ¥1,872 million, segment profit of ¥216 million). In FY2027 (ending May 2027), 6 projects are planned for sale, and revenue is expected to recover compared to the previous period. The company will continue to carefully select and acquire undervalued income properties and enhance added value through efficient renovation and leasing.

In FY2026 (ending May 2026), no revenue was recognized, and a segment loss of ¥139 million was recorded due to a write-down of inventory valuation. As the condominiums currently under development are expected to take approximately two years to complete, no revenue recognition is planned for FY2027 (ending May 2027) either. The company will target single-person households and dual-income power couples as its primary customer segments, and will proceed with property planning and acquisition leveraging its creative design and presentation design capabilities.

Last updated: July 17, 2026