LEOPALACE21 CORPORATION

Business Details

Operates apartment leasing and management, maintenance and repair construction, broadband services, rent debt guarantee business, company housing agency business, solar power generation business, small-amount short-term insurance business, real estate brokerage business, and more. The primary target is single-person households, and the company has established a unique position by concentrating the provision of furnished and appliance-equipped studio apartments in major metropolitan areas. Demand for corporate dormitories and company housing, as well as the capture of foreign national tenants, also support the revenue base. In FY2026 (ending March 2026), sales were ¥429,623 million and operating profit was ¥44,295 million, driving overall group earnings.

Recent Overview

Both occupancy rate and rent unit price improved, resulting in a substantial year-on-year increase in both sales and operating profit.

In FY2026 (ending March 2026), the Leasing Business improved, with the period-end occupancy rate at 88.78% (up 1.21 points year-on-year) and the average occupancy rate during the period at 85.78% (up 0.22 points year-on-year). The contracted rent unit price index continued its upward trend, reaching 111 (up 4 points from the prior period-end). As a result, sales rose to ¥429,623 million (up 3.0% year-on-year), and operating profit increased substantially to ¥44,295 million (up 16.4% year-on-year), owing to the effect of higher sales and optimization of the cost structure. Note that, effective April 1, 2026, the Silver (Senior Care) Business was transferred via a company split (absorption-type split) to the wholly owned subsidiary Az Residence Co., Ltd., and management resources are expected to be increasingly concentrated on the Leasing Business going forward.

Key Products

Growth Drivers

• Continued upward trend in rent unit prices (contracted rent unit price index reached 111, up 4 points from the prior period-end)
• Improvement in occupancy rate (period-end occupancy rate of 88.78%, up 1.21 points from the prior period-end)
• The number of single-person households is expected to increase through 2035, keeping demand for single-occupant rental housing at a high level
• Expansion of demand for corporate dormitories and company housing (linked to the effective job openings-to-applicants ratio, and deepened corporate sales efforts by top sales personnel)
• Increase in foreign national tenants and international students (driven by the expanding foreign resident population)
• Improved profitability through optimization of the cost structure (containment of cost of sales and improvement in gross profit margin)
• Optimization of the managed property portfolio under the medium-term management plan "New Growth 2028"

Risks

• Risk of decline in occupancy rate (currently 88.78%, but downward pressure from intensifying competition and demographic changes)
• Increase in vacant housing and intensifying competition in the rental housing market due to population decline and aging society with fewer children
• Increase in maintenance and repair costs due to the aging of managed properties
• Continued response to properties with construction defects (need to maintain a renovation response framework)
• Risk of increased borrowing costs amid rising interest rates (long-term borrowings of ¥30,000 million recorded)
• Risk of slowing growth in rent unit prices (possible decline in demand due to increased burden on tenants)