TOC Co., Ltd.

Business Details

The company owns commercial buildings in Tokyo and integrally operates leasing, management, and operation of rooms, exhibition halls, parking lots, etc. Key properties are the TOC Building (Shinagawa Ward) and commercial facilities such as Asakusa ROX. Tenants span a wide range including offices, commercial, exhibition halls, and hotels. The company promotes both differentiated operation/management services and cost reduction, with enhancing the added value of individual buildings as a pillar of its management strategy. The recovery in occupancy at the TOC Building, which resumed operations in stages from September 2024, was a major driver of performance for the current period.

Recent Overview

Segment sales up 19.6% and operating profit up 73.9%, a substantial improvement driven by the resumption of operations at the TOC Building.

Tenant acquisition and event customer attraction at the TOC Building, which resumed operations in stages from September 2024, proved successful, resulting in segment sales of ¥11,308 million (up 19.6% year-on-year) and operating profit of ¥2,388 million (up 73.9% year-on-year), a substantial increase in both revenue and profit. The overall occupancy rate improved from 68.2% at the end of the prior period to 81.7%. Renewal investments also continued, including TOC Building seismic reinforcement work (¥781 million) and chiller refrigeration equipment renewal (¥719 million). The period-end fair value of rental real estate, etc. was ¥189,082 million, holding substantial unrealized gains well above the book value of ¥59,130 million.

Key Products

Growth Drivers

• Continued recovery of the TOC Building's occupancy rate (further room for improvement from the period-end occupancy rate of 65.9%) and enhanced customer attraction leveraging event and logistics functions
• A return-to-office trend in central Tokyo leading to declining vacancy rates and rising rent levels
• Continued solid inbound demand contributing to commercial building earnings
• Enhancement of building added value through ongoing renewal investments such as TOC Building seismic reinforcement work and chiller refrigeration equipment renewal
• Optimization of the business portfolio through acquisition of income-producing properties and investment in real estate investment funds, etc., using surplus funds
• Improvement in occupancy and rent levels at existing buildings (maintaining high occupancy at normally operating buildings)

Risks

• Risk of delayed recovery in the TOC Building's occupancy rate (occupancy remained at only 65.9% including temporary use at period-end, and it may take considerable time to reach full occupancy)
• Deterioration in office supply-demand balance due to worsening real estate market conditions (rising vacancy rates, falling rent levels)
• Impact on commercial building performance from declining personal consumption due to domestic economic downturn and price increases
• Uncertainty regarding future prospects due to US trade policy developments, yen depreciation, geopolitical risks, etc.
• Long-term earnings gap risk and construction cost increase risk in the lead-up to the new TOC Building plan (construction assumed to start in or after 2036)
• Need for enhanced information security measures in light of the cyberattack incident that occurred on December 4, 2025
• Risk of facility closures or reduced operating hours due to the spread of infectious diseases, etc.