Mullion Co., Ltd.

Business Details

The Company owns and operates residential rental properties for single-person households in major cities nationwide, centered on the Tokyo metropolitan area. The business consists of three services: (1) Real Estate Leasing Services (long-term ownership, sublease, and property management contracting), (2) Real Estate Securitization Services (crowdfunding-type anonymous partnership products based on the Act on Specified Joint Real Estate Ventures: Mullion Bond, Salaryman Bond, and i-Bond), and (3) Real Estate Sales. Tokyo offices of local governments and similar entities form a stable customer base for rental properties in the Tokyo metropolitan area. Anonymous partnership deposits (balance of ¥5,207 million as of end-March 2026) function as a unique fundraising method.

Recent Overview

Revenue and profit increased in the first half, but the full-year forecast anticipates a significant decline in revenue and profit year on year. As a subsequent event, the Company resolved to reclassify four fixed-asset properties as real estate for sale

In the first half of FY2026 (ending March 2026) (October 2025 to March 2026), revenue was ¥787 million (up 1.7% year on year) and operating profit was ¥181 million (up 12.2% year on year), representing increases in both revenue and profit. Real Estate Leasing Services declined to ¥563 million (down 5.1% year on year), while Real Estate Securitization Services increased to ¥177 million (up 3.5% year on year). The Company acquired one apartment building each in Suginami Ward and Setagaya Ward as new properties, with expenditures for acquisition of tangible fixed assets reaching ¥1,233 million. Short-term borrowings increased by ¥865 million, expanding total assets to ¥19,951 million. As a subsequent event, at the Board of Directors meeting on May 12, 2026, the Company resolved to reclassify four fixed-asset properties as real estate for sale effective September 30, 2026, indicating a policy of improving portfolio quality and enhancing profitability. The full-year earnings forecast anticipates a substantial decline in performance compared to the prior year, with revenue down 20.1%, operating profit down 27.9%, ordinary profit down 39.9%, and net profit down 47.7%.

Key Products

Growth Drivers

• Continued increase in the number of single-person households (rising from 25.5% to 34.6% of general households compared to 2010), supporting robust demand for rental housing for single-person occupants
• Maintenance of occupancy rates through a stable rental customer base centered on Tokyo offices of local governments and similar entities
• Strengthening of a unique fundraising base through increased revenue from Real Estate Securitization Services (up 3.5% year on year) and expansion of the anonymous partnership deposit balance (¥5,207 million)
• Advancement of i-Bond tokenization and expansion of securitization products in response to security token regulations under the Act on Specified Joint Real Estate Ventures (amended Financial Instruments and Exchange Act effective November 2024)
• Qualitative improvement of the portfolio and enhanced profitability through the planned reclassification of four fixed-asset properties as real estate for sale (scheduled for September 30, 2026)

Risks

• Continued high levels of the condominium real estate price index (225.1 as of December 2025, with 2010 = 100), leading to increased costs for acquiring new properties and declining investment yields
• Increased interest expenses (¥77 million in the first half, up 23% year on year) amid rising interest rates, and the risk of higher borrowing costs. Short-term borrowings have surged to ¥1,812 million (up 91% from the end of the prior fiscal year), increasing interest rate sensitivity
• Revenue from Real Estate Sales fluctuates significantly depending on whether property sales occur, resulting in high period-to-period performance volatility (the full-year forecast anticipates a 20.1% year-on-year decline)
• Risk to cash flow from redemption risk related to anonymous partnership deposits (¥5,207 million) and changes in the environment for new fundraising. Payments of anonymous partnership profit distributions reached ¥76 million in the first half
• Uncertainty exists regarding the impact on the following fiscal year's (FY2027, ending March 2027) performance of the reclassification of four fixed-asset properties as real estate for sale (effective September 30, 2026), which is currently under review
• Risk of changes in legal regulations such as the Act on Specified Joint Real Estate Ventures and the Building Lots and Buildings Transaction Business Act, as well as compliance risk related to real estate securitization products
• Deterioration of the overall business environment in the real estate industry due to rising material prices and construction costs stemming from geopolitical risk, and rising long-term interest rates