Sumitomo Realty & Development Co., Ltd.

The company holds an office portfolio exceeding 1.5 million tsubo of total floor space within Tokyo's 23 wards, with 84% concentrated in the seven central wards. Through its "land creation capability" — consolidating subdivided plots and applying redevelopment methods — it achieves NOI yields exceeding 7% against completed property acquisition yields of 2.5-3.5%. This asset formation capability, which entails high barriers to entry, is a source of competitive advantage that is difficult for competitors to replicate.

In FY2026 (ending March 2026), the company achieved net sales of ¥1,057,765 million, operating income of ¥299,155 million (operating margin of 28.3%), and net income of ¥212,535 million, with net income marking a record high for the 13th consecutive fiscal year. The Real Estate Leasing segment's operating margin stands at an extremely high 45.6%, establishing a stable earnings structure resilient to economic fluctuations.

In the condominium sales business, the company holds approximately three years' worth of completed inventory ("treasury stock") exceeding 6,000 units, adopting a unique sales strategy that does not rely on selling out before completion. For units scheduled to be booked in FY2027 (ending March 2027), the majority of contracts had already been completed at the start of the period, giving earnings visibility that significantly exceeds the industry average. This inventory strategy enables stable supply even in phases where construction delay risk increases.

Continuing to improve occupancy rates of existing buildings (4.3% at the end of the current fiscal year) and to spread rent increases. Maintaining an over 90% pre-leasing rate for newly completed buildings such as "Sumitomo Fudosan Osaki Twin Building West Wing" and "Sumitomo Shiba Park Building," the company aims for Real Estate Leasing operating income of ¥224,000 million (a record high) in FY2027 (ending March 2027).

Effective April 1, 2025, the Shinchiku Sokkuri-san business and Custom-Built Homes business were integrated and spun off into Sumitomo Fudosan Housing Co., Ltd. Through deepening business integration, the company targets an early 50% increase in sales to reach ¥300 billion, promoting the standardization of construction systems, expansion of human capital investment, and enlargement of workforce. The order backlog at fiscal year-end reached its highest level since the COVID-19 pandemic, laying the groundwork for a rebound in performance.

At the end of the current fiscal year, 56 issues with an acquisition cost equivalent to ¥82.2 billion were placed into a management and disposition trust and reclassified as pure investments. The acquisition cost balance of cross-shareholdings stood at ¥158.1 billion (7.8% of shareholders' equity), achieving the target of reducing the ratio to 10% or below five years ahead of the original plan. Dividends are maintained on an increasing trend, from ¥65 per year (FY2026, ending March 2026) to a forecast of ¥52 per year (FY2027, ending March 2027) on a stock-split-adjusted basis.

As a new growth pillar under the 10th Medium-Term Management Plan, the company is promoting investment in rental assets in the BKC district of Mumbai, India. During the current fiscal year, a capital increase was made to the Mumbai subsidiary. The company aims to cultivate this as a second rental business base after central Tokyo, but the initiative carries development risk and local regulatory risk, requiring continuous monitoring of progress.