PROPERST CO.,LTD.

Business Details

A business that develops condominiums leveraging the Company's planning and design capabilities, primarily in the Greater Tokyo area, targeting single households and power couples for sales. Differentiation is achieved through independent conceptual space design and individual naming for each project. In FY2026 (ending May 2026), there were again no delivered properties, resulting in zero sales, and a significant expected increase in construction costs for properties under development led to an inventory valuation loss. As development is expected to take approximately two years, no sales are scheduled to be recorded in FY2027 (ending May 2027).

Recent Overview

Zero sales for two consecutive periods; recorded segment loss of ¥139 million due to inventory valuation loss

In FY2026 (ending May 2026), there were no delivered properties for which sales could be recognized, resulting in zero net sales. In addition, since the construction cost of properties under development is expected to increase significantly from the initial plan, inventory was reassessed, resulting in a segment loss of ¥139 million due to the valuation loss. Segment assets increased from ¥376 million at the end of the prior period to ¥990 million, reflecting continued development investment. No sales are scheduled to be recorded in FY2027 (ending May 2027) either, as development completion is expected to take approximately two years.

Key Products

Growth Drivers

• Anticipated future price increases for properties in station-proximate areas of the Greater Tokyo area, supported by limited supply and resilient demand
• Property differentiation and customer appeal through the Company's unique creative design and presentation design capabilities
• Expected contribution to earnings from FY2028 (ending May 2028) onward from currently ongoing development projects
• Strategy focused on the growth target segments of single households and power couples

Risks

• Risk of period-to-period sales volatility due to concentration or unevenness in property delivery timing (zero deliveries in FY2025 and FY2026, ending May 2025 and May 2026, with none scheduled for FY2027, ending May 2027, either)
• Risk of inventory valuation losses due to significant increases in construction costs (already realized in FY2026, ending May 2026)
• Risk of declining profit margins if cost increases from rising land prices and construction costs cannot be passed through to selling prices
• Risk of declining demand and increased funding costs associated with rising interest rates
• Risk of capital being tied up due to prolonged development periods (approximately two years)
• Risk of market deterioration, such as the decline in the first-month contract rate for condominiums in the Greater Tokyo area (64.9% in May 2026), falling below the boom-bust threshold of 70.0% for three consecutive months