Mitsui Fudosan Co. , Ltd.

Business Details

The core segment of the Mitsui Fudosan group, centered on the leasing of domestic office buildings and retail facilities (LaLaport, MITSUI OUTLET PARK, etc.). Also operates office and retail facility leasing at overseas locations including the United States, the United Kingdom, Malaysia, and Taiwan. Its strengths are a portfolio of well-located, high-quality managed properties with low vacancy rates, and it also provides soft services that address the diverse needs of tenant companies. In FY2026 (ending March 2026), revenue was ¥936,601 million, accounting for approximately 35% of total company revenue, making it the largest segment.

Recent Overview

Revenue increased on expansion of domestic and overseas offices and retail facilities, but overseas impairment losses widened, limiting profit growth

In FY2026 (ending March 2026), the leasing segment achieved increased revenue and profit, with revenue of ¥936,601 million (up ¥64,270 million year on year) and business profit of ¥177,011 million (up ¥581 million year on year). Office revenue was ¥486,495 million (up ¥19,893 million year on year), and retail facility revenue was ¥334,919 million (up ¥35,818 million year on year), with both segments expanding. On the other hand, impairment losses rose sharply to ¥19,112 million (from ¥5,222 million in the prior period), relating to overseas properties including one in Kuala Lumpur, Malaysia. The greater Tokyo area office vacancy rate (non-consolidated) was maintained at a low 1.6%, though this represented an increase of 0.3pt from 1.3% at the end of the prior period. The fair value of leased properties, etc. of ¥7,714,645 million significantly exceeded the book value of ¥3,729,540 million, with substantial unrealized gains continuing. For the next fiscal year, revenue of ¥970,000 million and business profit of ¥180,000 million are forecast.

Key Products

Growth Drivers

• Increase in domestic and overseas office rents (maintaining the low greater Tokyo area office vacancy rate of 1.6%, operation of newly completed properties)
• Growth in leasing profit accompanying increased sales at domestic and overseas retail facilities (new and full-year operation of LaLaport, MITSUI OUTLET PARK, etc.)
• Full-year contribution from newly operating properties (LaLaport Nangang Taipei, Anjo, Kawaguchi, MITSUI OUTLET PARK Kisarazu Phase 4, Okazaki, etc.)
• Expansion of the earnings base through new openings of senior residences (Park Wellstate)
• Increase in leasing revenue from overseas offices and retail facilities (United States, United Kingdom, Taiwan, etc.)
• Potential asset value arising from the significant gap between the fair value (¥7,714,645 million) and book value (¥3,729,540 million) of leased properties, etc.

Risks

• Increased funding costs due to rising interest rates (large outstanding interest-bearing debt of ¥4,632,547 million)
• Rising costs for new development due to soaring construction costs and labor shortages (capital expenditure of ¥3,000,000 million forecast for the next fiscal year)
• Risk of fluctuation in office demand (greater Tokyo area vacancy rate rose from 1.3% at the end of the prior period to 1.6%)
• Foreign exchange risk in overseas operations (impact of translation differences amid yen depreciation)
• Risk of impairment losses (impairment losses of ¥19,112 million recorded in the leasing segment during the period, a significant increase year on year)
• Impact on overseas operations from global geopolitical risk and uncertainty over US trade policy
• Increased expenses associated with the completion of domestic office and US leasing properties (already factored into next fiscal year's earnings forecast)