ENVALITH
株式会社レオパレス21 logo

LEOPALACE21 CORPORATION

8848・Prime Market・Real Estate

Official website
株式会社レオパレス21 logo
LEOPALACE21 CORPORATION8848

Business

LEOPALACE21 began selling its urban-type apartment "LEOPALACE21" in 1985, and currently operates with the Leasing Business as its core, alongside the Silver (Senior Care) Business (85 Nursing Care Facility "Azumien" facilities), and operation of LEOPALACE RESORT GUAM, among others. Its primary targets are single-person tenants, corporate clients (dormitories/company housing), and foreign national tenants, and it has established a unique position by intensively supplying furnished, appliance-equipped studio units concentrated in major metropolitan areas. Of net sales of ¥444,820 million, the Leasing Business accounts for approximately 97%, with stable rental management under the Master Lease scheme forming the earnings base. Listed on the Prime Market of the Tokyo Stock Exchange.

Business Model

A business model in which the company master-leases (sublease) apartments from owners and re-lets them to tenants to earn rental income. It offers furnished, appliance-equipped studio units as a differentiated product, broadly acquiring corporate contracts (dormitories, company housing), individual tenants, and foreign national tenants. Revenue is maximized by managing both occupancy rates and rent per unit, while Ancillary Services (Broadband, etc.) such as insurance, broadband, and guarantees supplement earnings.

Company Strengths

At the end of FY2026 (ending March 2026), the occupancy rate reached 88.78% (up 1.21 points from the previous fiscal year-end), and the contracted rent unit price index reached 111 (up 4 points from the previous fiscal year-end). Acquisition of corporate contracts, particularly among foreign nationals, has been strong, with foreign-national residents accounting for approximately 14% of the total. These factors combined to achieve Leasing Business net sales of ¥429,623 million (up 3.0% year on year) and operating profit of ¥44,295 million (up 16.4% year on year).

Unlike competitors that premise long-term residency for family households, the company has established a unique business model concentrating the supply of furnished and appliance-equipped studio apartments in major metropolitan areas. The number of single-person households is projected to increase through 2035, and the company's proprietary product design directly addresses this demand. Flexible contract formats that can also accommodate demand from corporate dormitories, company housing, and the acceptance of international students and foreign-national workers serve as a differentiating factor from competitors.

In FY2026 (ending March 2026), the gross profit margin improved to 20.1% (up 2.2 points year on year), and the operating profit margin improved to 8.1% (up 1.3 points year on year). By increasing net sales by 3.0% while restraining the increase in cost of sales to +0.3%, gross profit increased by 15.4%. EBITDA reached ¥39,211 million (up 19.8% year on year), and operating cash flow reached ¥38,467 million (up ¥12,568 million year on year), demonstrating a high capacity to convert profit into cash.

ENVALITH's Perspective

Operating profit for FY2026 (ending March 2026) reached ¥35,966 million (+23.0% year on year), marking a fifth consecutive period of improvement, and EBITDA also progressed steadily at ¥39,211 million (+19.8% year on year). However, profit attributable to owners of parent decreased to ¥14,933 million (-16.4% year on year). The main causes were a loss on retirement of treasury stock acquisition rights of ¥10,068 million (extraordinary loss) and income tax adjustments of ¥8,224 million associated with the write-down of deferred tax assets, both of which are strongly one-off in nature. The next focal point will be whether the FY2027 (ending March 2027) forecast of net income of ¥22,200 million (+48.7% year on year) can be achieved.

During the fiscal year under review, the company carried out treasury share repurchases of ¥72,212 million and treasury stock acquisition rights repurchases of ¥10,102 million, resulting in net assets decreasing by ¥41,875 million from ¥88,268 million to ¥46,393 million, and the equity ratio falling by 14.5 percentage points from 37.5% to 23.0%. On the other hand, the market-value-based equity ratio rose to 114.3% (from 85.6% in the previous period), which can be evaluated positively from the perspective of shareholder returns. However, the rise in financial leverage and the decrease in cash and cash equivalents to ¥55,924 million (from ¥87,075 million in the previous period) warrant continued attention from the perspective of future growth investment capacity.

The Silver (Senior Care) Business posted an operating loss of ¥1,062 million on sales of ¥13,652 million (worsening from a loss of ¥803 million in the previous period), while Other Businesses also saw its operating loss widen to ¥2,677 million (from a loss of ¥2,608 million in the previous period), with losses expanding in both segments. The company spun off the Silver (Senior Care) Business into AZ Residence Co., Ltd. in April 2026, which is expected to clarify management issues and improve operational efficiency, but the effect on consolidated profit and loss improvement is expected to be limited. Monetizing the ¥23,832 million in segment assets of Other Businesses (mainly the Guam resort) also remains an ongoing challenge.

Growth Strategy

Under the medium-term management plan "New Growth 2028," the company aims to maximize leasing revenue and achieve a dividend payout ratio of 30%.

Driving improvement on two fronts: occupancy rate (88.78% at fiscal year-end, +1.21 points year-on-year) and rent per unit (contracted rent unit price index of 111, +4 points year-on-year). By deepening corporate sales efforts and strengthening support for foreign national tenants, the company aims for net sales of ¥465,000 million (+4.5%) in FY2027 (ending March 2027).

Effective April 1, 2026, the Silver (Senior Care) Business was transferred via absorption-type company split to the wholly owned subsidiary AZ Residence Co., Ltd. This aims to clarify management issues and accelerate decision-making, with the goal of improving profitability across 85 nursing care facilities. Reducing the consolidated-basis loss remains a key challenge.

The company has set a target of achieving a dividend payout ratio of 30% in FY2028 (ending March 2028), with a planned dividend per share of ¥15 (an increase of ¥5 year-on-year) for FY2027 (ending March 2027). During the current fiscal year, the company conducted share buybacks totaling ¥72,212 million, aiming to improve capital efficiency and expand total shareholder returns.

Last updated: July 19, 2026