GRANDES,Inc.

Business Details

This segment is operated by Grandys Co., Ltd. and its subsidiary Sanai Home Co., Ltd. It plans, develops, and sells detached houses for first-time buyers (mid-range price band of ¥20 million to ¥40 million) in core regional cities and Tokyo metropolitan suburbs, as well as investment properties for wealthy individuals and corporations, including the "Resco" investment condominiums, "Atelese" wooden apartments, and simple lodging facilities. External customer revenue for FY2025 (ended December 2025) was ¥2,039 million, accounting for approximately 60% of group revenue as the mainstay business, but Q1 FY2026 (ending December 2026) saw a substantial revenue decline due to weak sales in the Kyushu-Shikoku area.

Recent Overview

Q1 revenue fell 39.1% year on year due to weak sales in the Kyushu-Shikoku area, resulting in a segment loss

In Q1 FY2026 (ending December 2026, January to March), revenue for the Real Estate Sales Business was ¥305 million (down 39.1% year on year), with a segment loss of ¥3 million (compared to a segment profit of ¥58 million in the same period of the prior year). While a certain amount of business progressed in the Kanto area with the sale of an investment wooden apartment (Atelese) in Saitama Prefecture, sales of detached houses in the Kyushu-Shikoku area were weak due to cautious homebuying sentiment among genuine demand buyers and intensifying sales competition. Longer sales periods and fewer contracts significantly weighed on performance.

Key Products

Growth Drivers

• Increase in the number of detached houses sold and improvement in unit prices and profit margins in the built-for-sale housing division
• Expansion of the business base into the Kanto area (Tokyo and Saitama Prefecture) through the consolidation of Sanai Home Co., Ltd. (confirmed by the first Kanto-area sale of an investment wooden apartment)
• Stabilization and diversification of rental income through the accumulation of self-owned properties in the investment real estate division
• Easing of the competitive environment due to an increase in the number of operators withdrawing from the built-for-sale housing business in regional areas
• Improved customer awareness and acquisition of potential customers through enhanced web marketing and public relations

Risks

• Risk of weak detached house sales in the Kyushu-Shikoku area due to cautious homebuying sentiment among genuine demand buyers and intensifying sales competition (materialized in Q1 FY2026, ending December 2026)
• Risk of sluggish sales of investment real estate (large rental condominiums, simple lodging facilities): a sharp decline of over 80% YoY has occurred in the past
• Real estate prices remaining elevated due to rising construction costs and interest rates, coupled with weakening purchase intent among genuine demand buyers
• Recoverability risk of goodwill (unamortized balance of ¥72 million as of end of Q1 FY2026) associated with the acquisition of Sanai Home
• Risk of demand fluctuation due to economic cycles and changes in housing tax policy (a business characteristic with large performance swings)
• Risk of rising interest rates due to reliance on borrowing to fund investment real estate development (long-term borrowings balance of ¥1,761 million)