ENVALITH
スターツコーポレーション株式会社 logo

STARTS CORPORATION INC.

8850・Prime Market・Real Estate

Official website
スターツコーポレーション株式会社 logo
STARTS CORPORATION INC.8850

Business

STARTS CORPORATION is a comprehensive real estate group founded in 1969, comprising 85 consolidated subsidiaries and 1 equity-method affiliate. It positions itself as a "Total Solution Company," providing one-stop services ranging from proposals for effective land utilization to construction, rental management, brokerage, condominium sales, and financial consulting. Its main customers are rental housing owners, corporate real estate holders, and individual investors, and it maintains a network across major domestic cities centered on the Tokyo metropolitan area as well as 29 cities in 18 countries overseas, including Asia, North America, Europe, and the Middle East. The company holds diverse stock assets, including 158,562 units under real estate management, 632 Pitat House FC stores, and 131 elderly support facilities, and also operates publishing, hotel, elderly support, and childcare businesses.

Business Model

The core of the business is a "stock-type layered revenue business" in which, after acquiring customers through construction proposals to landowners (Construction Business), the company accumulates recurring revenue through fee-based businesses such as rental management, maintenance, brokerage, insurance, and trusts. The Real Estate Management Business (net sales of ¥102,591 million) forms the largest segment, with a structure in which management fees, rental income, and maintenance sales automatically expand in line with the increase in the number of managed units. High-margin fee-based businesses such as sales brokerage, finance, and insurance complement this, enhancing the revenue stability of the group as a whole.

Company Strengths

As of the end of March 2026, the number of apartment and condominium units under management reached 158,562, resulting in continued accumulation of management fees, renewal fees, and maintenance revenue. Sales in the Real Estate Management Business stood at ¥102,591 million (up 7.7% year on year), and operating profit was ¥14,643 million (up 10.8% year on year), maintaining stable growth and forming the core of stock-type revenue that is less susceptible to economic fluctuations.

As of the end of March 2026, the order backlog in the Construction Business remained at a high level of ¥155,665 million (up 9.2% year on year), functioning as a leading indicator of revenue recognition in subsequent periods. The cumulative number of Seismic Isolation Structure Buildings ordered reached 656, establishing the product as a differentiated offering. Driven by an increase in large-scale wooden construction and large-scale corporate projects, operating profit for the period improved significantly to ¥7,746 million (up 26.7% year on year).

The Pitat House Network operates a total of 632 stores, comprising 116 directly-operated Group stores and 516 franchise stores, generating stable royalty income from franchisees. Combined with securities, trust, small-amount short-term insurance, REIT asset management, and Real Estate Security Tokens (STARTS Asset Token), the Financial & Consulting Business achieved an operating margin of 25.2% (operating profit of ¥2,235 million), enhancing the Group's earnings diversity.

ENVALITH's Perspective

In FY2026 (ending March 2026), net sales reached ¥251,911 million (up 8.1% YoY), operating income ¥36,272 million (up 11.2% YoY), and ordinary income ¥38,244 million (up 14.5% YoY), with acceleration at every profit stage. Net sales, which had remained flat through the previous period, clearly turned to growth. The main drivers were increased orders for large-scale construction projects and price revision effects in the Construction Business, expanded maintenance revenue in the Real Estate Management Business, and a substantial revenue increase in the Condominium & Housing Sales Business (up 136.8% YoY). Financial soundness was also maintained, with an equity ratio of 53.5% and an interest-bearing debt ratio of 0.36x.

Cash flow from operating activities decreased significantly to ¥17,221 million from the previous period's ¥25,915 million, mainly due to an increase in inventories of ¥11,747 million, an increase in trade receivables of ¥7,462 million, and income tax payments of ¥11,938 million. Meanwhile, cash flow from investing activities expanded to ¥(19,136) million (from ¥(8,769) million in the previous period), with increases in acquisition of property, plant and equipment of ¥15,145 million and acquisition of investment securities of ¥5,322 million. The balance of cash and cash equivalents declined to ¥74,904 million, and continued attention is warranted regarding the progress of growth investments and changes in capital efficiency.

The forecast for the next fiscal period is bullish, projecting net sales of ¥290,000 million (up 15.1% YoY) and operating income of ¥40,000 million (up 10.3% YoY). The largest variable factor is the Condominium & Housing Sales Business, which is expected to more than triple its revenue from ¥7,043 million to ¥23,300 million. External risk factors that could weigh on results include a decline in mortgage loan commission income amid rising interest rates (already apparent in the Financial & Consulting Business), persistently high construction material and labor costs, and supply chain impacts from destabilizing overseas conditions. The Publishing Business continues to struggle, with revenue down 9.5% YoY, and the success of IP development will be key to a recovery in earnings.

Growth Strategy

Accelerating growth through deepened accumulation of stock-type revenue, substantial expansion of the Condominium & Housing Sales Business, and entry into new business areas

Through strengthened organizational structure focused on central urban areas and promotion of new contract acquisition sales activities, the number of apartment and condominium units under management is being expanded from 158,562 units as of the end of March 2026 to a target of 165,000 units in the next fiscal period. Stable revenue is being accumulated through a three-layer structure of management fees, maintenance, and rental business sales, with the Real Estate Management Business targeting next-period sales of ¥110,000 million and operating profit of ¥15,400 million.

Through the completion and handover of Condominiums for Sale (Alpha Grande Series) at Ichinoe 7-chome and Shin-Yokohama, the handover of New Detached Houses for Sale (Quon Garden Series) at Sakurajosui and Seijo II, and the transfer of large-scale rental housing properties, next-period sales of ¥23,300 million (3.3 times the current period) and operating profit of ¥1,800 million are planned. The Real Estate Security Token (STARTS Asset Token) and the Property Transfer to STARTS Proceed Investment Corporation scheme will continue to be utilized.

Backed by an order backlog of ¥155,665 million (up 9.2% year on year), next-period sales of ¥85,200 million and operating profit of ¥7,900 million are planned. The company aims for steady order growth through differentiated products such as Seismic Isolation Structure Buildings (656 buildings cumulatively), the soundproof rental housing brand "Otonowa," and wooden rental apartment buildings with standard-equipped solar power generation facilities, combined with expanded order-taking areas through strengthened personnel networks in major cities.

The establishment of STARTS Career Management Co., Ltd. marks entry into the worker dispatching and fee-charging employment placement business, while expanded rollout of the Real Estate Security Token "STARTS Asset Token" strengthens the business scope of the Financial & Consulting Business. Next-period sales of ¥9,500 million and operating profit of ¥2,400 million are planned.

Two new facilities are planned to open in the greater Tokyo metropolitan area in the next fiscal period, further expanding the network to 131 facilities. Through the use of AI and other systems to improve service quality and productivity, and the expansion of community-based nursing care and childcare services, next-period sales of ¥13,600 million and operating profit of ¥600 million are targeted. It should be noted that rising food and labor costs due to price inflation continue to be a factor pressuring profitability.

Last updated: July 19, 2026